News and analysis
February 11, 2015

S&P Says Nonprofit Obamacare Coverage Co-Ops Losing Money

Most of the 23 nonprofit health-insurance plans set up with federal loans to offer coverage through Affordable Care Act exchanges are struggling with cash flow, Bloomberg reports, citing an analysis issued Tuesday by Standard & Poor's. All but five of the Consumer Oriented and Operated Plans, or co-ops, lost money on their operations in the first nine months of 2014, according to the S&P report.

The co-ops, intended to compete with established insurers and hold down premiums, collectively received $3.4-billion in federal startup loans. One of the largest of them, Iowa-based CoOportunity Health, was taken over by the state late last year after running deeply into the red. Republican Obamacare critics have long opposed backing the co-ops, predicting they would struggle financially. The nonprofit plans saw large membership gains at the end of 2014 and are expected to gain millions of dollars in funding this year through other Affordable Care Act programs.