Tuesday, September 04, 2012

ObamaCare's Solyndra

LifeHealthPro has a mushy article on CA passing Co-op legislation.

In the article they mention 19 non-profits offering coverage in 18 states that have already been awarded $1 billion. That leaves $2.8 billion left to be "had".

Like most news articles, they mention that do-nothing conservatives are against it, like they are against everything and already the house is investigating.

"the House Oversight Committee recently announced it would investigate an estimated $845 million announced so far in subsidized loans to 10 CO-OPs operating in 10 states, citing a potential default rate as high as 50 percent."

Potential default rate of 50%; shouldn't all tax payors be against that? Co-ops suffer the same failure of logic that the green energy write-offs did.  The Liberals constantly tell us how greedy business owners are, if these entitled 1%er`s aren't willing to risk their own money then maybe there isn't a good business model to support?

Insurance is very simple: take the claims, add expense and profit and there is your premium. Unless you can fundamentally alter one of those three items there is no way to reduce premiums. As the article mentions co-ops did exist prior to PPACA;

"The country's largest co-op is Health Partners, a Minnesota-based co-op. It offers traditional comprehensive coverage for as low as $88 a month."

If there was a viable opportunity the market is obviously capable of taking it. What is more likely is that connected or quick thinking "non-profits" will start up a co-op with government loans, collect nice salaries, hire friends and family to provide for profit services such as underwriting, marketing, claims, then fold when the money runs out. See the numerous failures under the green jobs program.

The entire PPACA co-op concept doesn't increase the probability of success for these plans, doesn't alter the playing field or laws that current carriers operate under. It just gives away $3.8 billion to those quick enough to apply. I think the tax payors will be lucky if only 50% of them fail.

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