To date, more than half a million Americans have lost coverage thanks to the failure of these co-ops. The reason? The co-ops took on far too many customers at artificially low premiums, and, as the American Enterprise Institute and the Galen Institute noted earlier this year, are drawing down “unspent loan funds to pay medical claims.”
Despite mounting failures, the Obama administration has been unwilling to change course. Politico Pro has reported that state and federal regulators let some of the co-ops “reclassify certain loans as surplus, a move that financial analysts say will make the health plans’ balance sheets look better and potentially keep them from shutting down.” In other words, to hide their debts and project false solvency—until they, too, go under.