Friday, February 20, 2015

Co-Ops circling the drain?

Was Hawkeye state-based CoOpportunity Health's rapid growth - and even more rapid decline -  a harbinger of things to come? We've wondered about the Co-Op model for a while:

"The Freelancers Union, which provides health insurance to 25,000 of its members in New York State, is ending an experiment in providing low-cost insurance to independent workers"

That little "experiment" cost thee and me over $340 million. So, what does the future hold for these insurance company wannabe's?

Over at Forbes, Dr Scott Gottlieb posits that it's not likely to be very bright, and worrisome:

"The co-ops aren’t dying only because they were hastily constructed, or poorly managed. Their disaster is far more willful and deliberate. They meant to lose money."

Interesting take. But what possible motivation could there be to purposefully back a loser?

Well, if your actual end goal is single-payer (as we've maintained all along), then it begins to make sense.

A lot of sense.

Co-blogger Patrick adds:

This post from UPenn's Institute of Health Economics adds some financial perspective on the scope of the problem:

"The “combined ratio,” across all plans, is 116.8%, which corresponds to an underwriting loss of about $17 per $100 of premiums"

Hard to stay afloat when you're hemorrhaging cash. Or put another way:

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