Despite millions in taxpayer investment, the Louisiana Department of Insurance announced Friday that the state's Obamacare health insurance co-op will shut down by the end of 2015.
In September 2012, the Louisiana Health Co-operative received $66 million from the U.S. Centers for Medicare and Medicaid Services, according to CMS records. But by 2014, the National Association of Insurance Commissioners reported that they had used up at least half of the cash, while suffering a net operating loss of $23 million.
Out of a total state population of 4.6 million, the co-op had only managed to enroll about 17,000 paid subscribers, The Daily Caller reported.
AM Best, Insurance rating company AM Best reported in the third quarter of 2014 that the Louisiana co-op’s indebtedness was 198 percent, making it one of the worst performing Obamacare nonprofits in the nation.
“The onerous burdens of Obamacare have shocked health insurance markets and caused instability in pricing and predictability, and as a result, we’ve seen premiums spike upward,” Louisiana Insurance Commissioner Jim Donelon said in a statement July 24, announcing the closure of the co-op.
“Start-ups in insurance, especially health insurance, are always a tough row to hoe. Obamacare has made that even more difficult."
But that wasn't supposed to be the case.
Democrats introduced co-ops as a “public option” that was supposed to demonstrate just how great and affordable government-run health insurance could be in the future. The Washington Post explained back in 2013, “The co-ops differ from traditional insurers in their nonprofit status, consumer focus and organizational structure; they will be governed by boards controlled by policyholders.”
But in actuality, the co-ops were mired in scandal, corruption, and debt.
Louisiana's co-op marks the second collapse of an Obamacare health care co-op this year and the third overall, The Daily Caller reported.
Back in February, the Iowa Insurance Department closed the doors of Co-Opportunity Health, an Obamacare co-op that served more than 100,000 customers in Iowa and Nebraska. And the first failure occurred in 2013, the Caller reported, when the Vermont Insurance Commissioner declined to grant a license to a new Obamacare health co-op due to conflicts of interest.