Colson: A word from Screwville on Colorado Health-Op
October 22, 2015
Welcome to Screwville, a nationwide village where hapless people get screwed by something they can't really see or understand.
It's kind of like Dr. Seuss' village of Whoville, from the 1954 book, "Horton Hears a Who!"
Whoville, just so you know, is a tiny world the size of a speck of dust floating in a threatening, frightening whirl of wind, rain and hostile creatures until it is plucked from the firmament by an elephant named Horton.
Horton, after hearing a voice emanating from the dust-mote, decides to preserve and protect the little world and its inhabitants, proclaiming, "A person's a person, no matter how small."
It's a great book, you should read it.
Here in Screwville, unfortunately, we have no Horton to save us from such nasty but garbled dark forces as "risk-corridors," legislative defunding and other bits of sabotage by Republicans who hate "Obamacare" and could not care less about the welfare of the little guys and gals whose taxes keep the country rolling.
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Something like 80,000 Coloradans learned at the end of last week that they will no longer have health insurance after the end of this year. Seems the state's health commissioner, Marguerite Salazar, decertified the Colorado Health-Op insurance provider, meaning the company would not be allowed to sell its insurance plans in 2016.
Colorado Health-Op is one of 23 nonprofit health-insurance "co-ops" (consumer operated and oriented plans) set up by the Affordable Care Act (ACA) passed in 2010, to offer a relatively low-cost, consumer-friendly alternative to the shark-infested waters known as America's for-profit insurance market.
A key bulwark of the co-ops was a federal fund, fed by tithes from insurance companies, that was supposed to provide support and stability to the embryonic health-care nonprofits during the initial years of the ACA. In particular, the fund was intended to help the insurance nonprofits get through situations where premium payments temporarily were insufficient to cover claims by policy holders.
Under the rather clumsy titles of "risk-corridors" and other bureaucratic nomenclature, this method was essentially a risk-spreading mechanism, creating a fund to be tapped as needed by co-ops and any other insurers who got into financial difficulties resulting from all the complexities and unavoidable problems of remaking the country's insurance markets.
In fact, according to the Health Affairs website of the Robert Woods Johnson Foundation, this "risk-corridor" method was modeled after the Medicare Part D legislation created under former President George W. Bush. It has been in place since 2006, and seems to have worked well.
So the model appeared to be a valid one when applied to the ACA, and the co-ops depended on it.
In the case of Colorado Health-Op, the insurer slashed its premium prices for the 2015 fiscal year, and found itself in the strange position of capturing about 40 percent of all the policies sold in late 2014 through the Health 4 Colorado marketplace, which was set up to manage the state's compliance with the ACA.
But, as often is the case with new business startups, Colorado Health-Op needed a little help from the feds as it got up and running. Even with the lion's share of customers, it ran into a kind of cash-flow problem that the risk-corridor fund was designed to ease.
Unfortunately for Colorado Health-Op and similar co-ops in seven other states, Congressional Republicans in 2013 managed to pull the fiscal rug out from under the stabilization fund. By inserting language in the regulations requiring that it be "budget-neutral," the Republicans engineered it so that even though money was being collected for the stabilization fund, it could not be paid out as envisioned by the creators of the ACA unless the Obama administration found other money to balance against the payments.
This meant that health-insurance co-ops such as Colorado Health-Op were caught in a bind created by gleeful Republicans determined to kill the ACA by hook, crook or legislative sleight-of-hand.
The fledgling companies could no longer count on payments they had been promised as part of the ACA roll-out, thanks to Republican interference, and were facing financial collapse as a result.
Of course, Colorado Sen. Cory Gardner, a Republican, was one of the first to jump up and condemn Colorado Health-Op, although he conveniently did not mention that he was one of the Republicans who in 2013 voted to create the very crisis that is now developing for the co-ops.
And that is where things stand now.
The CEO of Health-Op, Julia Hutchins, said her company is moving along as it expected and, after next year, would have been able to stand on its own two fiscal feet. But Salazar, at week's end, appeared to be in no hurry to help Health-Op achieve its goals, or to help the 80,000 Health-Op subscribers figure out how to get health insurance for 2016.
No, she apparently would prefer to just sit back with her nice salary and her comfortable set of state health insurance benefits and let the rest of us dangle in the wind.
And that, dear readers, is how it looks from Screwville today.
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