NTU urges all Representatives to vote “YES” on H.R. 954, the “CO-OP Consumer Protection Act of 2016.” This legislation would provide a temporary exemption from the individual mandate penalty to individuals who lose their health insurance coverage as a result of the closure of their states’ Consumer Oriented and Operated Plans (CO-OP).
One of the key provisions of the Patient Protection and Affordable Care Act (PPACA), was the creation of not-for-profit, consumer-managed CO-OP plans aimed at injecting more competition into the health insurance marketplace. The legislation provided $2.4 billion in start-up funds and loans to 23 state-based CO-OPs. Due to poor risk measurement, mismanagement, and a fundamentally flawed business model, one CO-OP after another has failed after marking significant losses. Now, near the end of 2016 the pool of CO-OPs has shrunk to only seven, with more closures anticipated in 2017.
So far, taxpayers have lost $1.7 billion on these failed insurance schemes and hundreds of thousands of consumers have experienced the often abrupt loss of their health insurance. For these consumers, the loss of their current plan can be a financial blow. Starting a new plan mid-year can mean once again paying out-of-pocket expenses until deductibles or other limits are reached. Consumers may have to search for a new doctor who accepts their new plan, a prospect that can cause significant upheaval for an individual currently under treatment for a health care problem.
Imposing the individual mandate penalty or tax on individuals who lose their coverage due to CO-OP closures would be to add insult to injury – and another costly burden to an already financially uncertain situation. Consumers shouldn’t be penalized for the misguided notions of CO-OP providers. This temporary exemption is a commonsense way to spare consumers additional costs due to PPACA’s profound shortcomings even as Congress continues the much-needed work of repealing that legislation and reforming our broken health care system.
Roll call votes on H.R. 954 will be included in our annual Rating of Congress and a “YES” vote will be considered the pro-taxpayer position.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700