Nearly half of the health insurance co-ops created in 2011 under the Affordable Care Act — dubbed Obamacare — have announced that they’ll be closing by the end of the year.
On Oct. 27, Utah’s Arches Health Plan became the 10th co-op to announce it would be closing, coming soon after the Obama administration decided to provide just 12.6 percent of the $2.87 billion sought by insurers to offset high coverage costs, The Fiscal Times reports.
The co-ops are nonprofit insurance plans that were started as part of Obamacare.
The other co-ops that announced closures are in Colorado, Iowa, Kentucky, Louisiana, New York, Nevada, Tennessee, South Carolina and Oregon.
A report from July by the inspector general of the Department of Health and Human Services showed that 21 of the 23 co-ops incurred net losses in 2014, with 19 of them showing losses because the claims they received exceeded revenue from premiums.
“Most of the 23 co-ops we reviewed had not met their initial program enrollment and profitability projections as of December 31, 2014,” the report reads. “The low enrollments and net losses might limit the ability of some co-ops to repay startup and solvency loans and remain viable and sustainable."
The Obama administration has yet to reveal next steps for the co-op program.
“Right now, that is what we are doing, is exploring our options,” said HHS Secretary Sylvia Mathews Burwell, according to The Hill.
“We are continuing to examine what, if any, options we have."