Sen. Ben Sasse to Block All HHS Nominees Following Obamacare’s CO-OP Program Failures

Models Colorado Health Co-op Brennan LinsleyAP
Brennan Linsley/AP

Sen. Ben Sasse announced Monday that he intends to block confirmation of all Health and Human Services (HHS) nominees until the Obama administration provides “transparent accounting” of Obamacare’s failures regarding the CO-OP health insurance program.

“I will act to block consideration and confirmation of every HHS nominee until families who lost their co-op insurance plans get straight answers,” Sasse said in a statement Monday. “Hundreds of thousands of enrollees lost their plans when co-ops in nine states collapsed and these victims deserve clear and honest answers from the bureaucrats who oversaw the mess.”

“Until these families are given complete answers, the Senate should not confirm any HHS nominees,” Sasse added. “This isn’t a partisan crusade—frankly, Republicans and Democrats from these nine states have an opportunity to stand together and demand answers for our constituents so that this kind of failure never happens again.”

The co-ops, or Consumer Operated and Oriented Plans, were established under Obamacare as nonprofits that would serve as alternatives to the big insurance companies, but would still provide subsidies as of January of 2014.

Eight of the 23 co-ops that were created, however, have failed. States that have experienced the failed co-ops are Tennessee, Colorado, Oregon, Kentucky, New York, Nevada, Louisiana, and a joint venture in Nebraska and Iowa called CoOportunity.

Sasse wrote to HHS Secretary Sylvia Burwell asking for her response regarding the failure of CoOportunity in particular, but received an “insufficient response,” according to his office. Sasse followed up with a letter on August 6, in which he asked nine specific questions.

The letter states:

Taxpayers have spent a total of $2.4 billion on loans for CO-OPs and hundreds of thousands of Americans have enrolled in these health plans. It is imperative that we understand the cause of these failures and that the Centers for Medicare and Medicaid Services (CMS) be working to protect taxpayers from wasted spending and consumers from unstable health plans.

Since sending the letter, however, Sasse’s office states Burwell has not responded.

Sasse’s statement indicates he will oppose HHS nominees and the fast-tracking of their confirmation, including the nomination of Karen DeSalvo, who has been nominated as an Assistant Secretary of Health and Human Services.

The HHS inspector general has said the co-ops lost hundreds of millions of dollars in their first year and failed to draw the number of customers government auditors anticipated, as the Washington Times reports.

In Oregon, for example, co-op Health Republic Insurance states its plans will be valid until the end of 2015, but customers should seek health insurance coverage next year at Similarly, customers of the Health Insurance Cooperative in Colorado were abandoned when the co-op was shut down by state regulators.

Co-ops spokesmen said they thought they would be receiving more taxpayer money to bolster their programs. They said they requested $2.87 billion, but will only receive $362 million.

Some health insurance analysts, however, say the problem with the co-ops lies in basic economics and the fact that some set their prices too low, causing major losses when claims costs were much higher than premiums.

“Since the health status of exchange enrollees was relatively unknown when the program began, plans struggled to set competitive prices that would attract enrollment but still be high enough to cover costs,” said Caroline Pearson, senior vice president at Avalere Health, a Washington-based consultant firm.

Kelly Crowe, CEO of the National Alliance of State Health CO-OPs, says its members are “exploring any and all options to ensure the federal government lives up to its promise to fulfill its obligations under the risk corridor program, including legal action.”

“Though HHS has stated it is committed to making all requested risk corridor payments over the three-year life of the program, for CO-OPs and other small insurers, three years is simply too long to wait,” she said.


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