The collapse of one of Iowa’s only insurers to offer Obamacare is a warning sign for ACA customers nationwide. CoOpportunity Health was one of 23 health care co-ops created under the ACA. It started selling insurance in Iowa and Nebraska in 2013 and “succeeded” where others failed: it attracted many customers. The New York Times reports on what happened next:
Its success apparently helped doom it. CoOportunity’s many customers needed more medical care than expected, according to Nick Gerhart, Iowa’s insurance commissioner, and it had priced its plans too low. After taking control of the co-op in late December, Mr. Gerhart decided last month that it could not be saved and asked a court to liquidate it. The co-op, he said at the time, faced more than $150 million in liabilities. That left its customers scrambling for new coverage, and providers wondering if millions of dollars in outstanding claims would ever get paid.
We’re not sure how attracting more sick customers than you can pay for because you set your premiums too low counts as a “success” in the first place. The result certainly isn’t something to celebrate: the collapse of CoOpportunity Health has caused chaos and hardship for its customers—and it’s not the only one. Though bigger insurers won’t be liquidated like this co-op was, early signs suggest that some of them also set their premiums too low. Premiums could rise for those insurers who did so, though we don’t yet know by how much. That’s a reminder to take current premium numbers with a grain of salt—and recognize that it’s still too early to holistically judge the success of the ACA.