September 29,2016

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Aaron Fobes, Julia Lawless (202)224-4515

Finance Republicans Press Administration on Financial Viability of Obamacare CO-OPs

As Enrollment Season Nears, Senators Say Transparency Needed for Patients and Taxpayers
WASHINGTON – In a letter today, Senate Finance Committee Republicans led by Chairman Orrin Hatch (R-Utah), pressed the Obama Administration for updated information regarding the financial viability of the remaining Consumer Operated and Oriented Plans (CO-OPs).  With the enrollment season nearing, the Senators asked the Centers for Medicare & Medicaid Services (CMS) to protect consumers that are currently enrolled in a CO-OP plan and potentially considering one for next year by assessing the financial viability of the remaining CO-OPs for the 2017 coverage year.  In the letter to CMS Acting Administrator Andy Slavitt, the Senators stressed the need for taxpayer dollars spent on failed CO-OPs to be fully repaid, noting that approximately 75 percent of the $2.4 billion allocated for CO-OPs went to failing entities. Of the 23 original CO-OPs, only six remain in operation today.   
“It is paramount that Congress and consumers have a clear understanding of the financial viability of all remaining CO-OPs that intend to offer coverage in 2017 to avoid plan cancellations and disruptions for consumers that could impact health care costs (such as premiums and deductibles) and access to doctors during the coverage year,” the senators wrote. “CO-OPs with questionable financial viability should not be permitted to offer plans in the individual market or small group markets for the 2017 coverage year.”
The senators went on to request CMS clarify how different criteria is applied to the 17 failed CO-OPs in order to determine whether payments such as advanced premium tax credits, cost-sharing reductions, reinsurance, risk corridor and risk adjustment payments are withheld.
The letter was signed by Senate Finance Committee Chairman Orrin Hatch (Utah) and Senators Chuck Grassley (Iowa), Mike Crapo (Idaho), Pat Roberts (Kan.), Mike Enzi (Wyo.), John Cornyn (Texas), John Thune (S.D.), Johnny Isakson (Ga.), Rob Portman (Ohio), Dean Heller (Nev.) and Tim Scott (S.C.).
The complete text of the letter is below and a signed copy can be found here.