The ACA and the Co-op’s

Co-op’s were part of the affordable care act. These are non-profit insurance companies started with seed money provided by the government. They were meant to provide competition for the insurance companies and were supposed to offer more than the competition.

Let’s examine what really happened. There were 23 co-op’s formed across the US. The one in Nevada was called Nevada Health Co-op. It was started by a grant from the government (yours and my tax dollars at work). The money was given to the Culinary Union to start the non-profit insurance company. I do not know how much money they got but it was substantial.

They operated for a couple of years here in Southern Nevada. They were top heavy in salaries paid to the executives and while their insurance offerings were good, they didn’t know how to run the business properly. They made decisions that were against basic insurance rules and regulations and the Nevada broker community had to tell them how things were done in the industry. That helped but was not enough to stave off closing their doors.

In August of last year there were rumors that things were not going well for the Co-op. They stopped paying commissions in August of 2015, stopped paying Doctors in October of 2015 and closed their doors on 12/31/2015.

Let’s look at what is left. The Nevada Health Co-op along with almost all of the other Co-op’s are out of business. They haven’t paid claims in almost a year, yet they are sitting on millions of dollars of grant money. CMS is now demanding the Co-op’s turn over that money to the government. In Nevada they have about 20 million dollars and claims for almost that amount. CMS is claiming first debtor status, a status they cannot inforce under current law. Yet, the Co-op cannot pay claims and the debtors cannot sue because it is against the law to do so. That has not stopped the suits however. The consumers are the losers.

To sum it up, the government got involved in private enterprise and did what they always do. They screw it up. Government should not be running businesses because they haven’t got the skills to do so. That should be done by private industry. Considering the mess this has left in Nevada, it sort of proves the point.

As of this writing we are at a standstill. The Co-op has the money to pay claims, the government claims the first debtor position and so far no one has won. This needs to be addressed and resolved so providers can be paid for their services.

Len Barend, The Barend Agency Inc.

702-250-2200

len@insurance4unevada.com

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