Grassley presses federal official on CoOportunity collapse

U.S. Sen. Chuck Grassley continued to push for answers on the federal government's role in CoOportunity Health's collapse, pressing U.S. Health and Human Services Secretary Sylvia Burwell during a Senate Hearing Wednesday.

The state of Iowa announced in December that it was taking over management of the not-for-profit insurer and determined to liquidate the company in December.

CoOportunity had too many members for its reserves, with just $13 million in cash and assets on hand as of Dec. 31. That - compounded with the fact that it could not obtain additional funds from CMS - forced it into a tough financial spot.

The 23 co-ops created under the Affordable Care Act were intended to add competition into the marketplace. Set up with $146 million in federal funds, CoOportunity was licensed to do business in 2013.

Grassley said CMS became aware of CoOportunity's financial situation over the summer, noting the insurer 'frequently inquired with CMS about the need for certainty ahead of open enrollment as it was clear that a liquidity crisis was developing.”

'CMS knew CoOportunity was going to be in trouble if it didn't get loans,” Grassley said.

Yet CMS ignored the warnings, Grassley said, and allowed CoOportunity back onto the marketplace, which began Nov. 15. CoOportunity had about 120,000 members - far more than original projections - when state regulators took over.

Gerhart is now urging CoOportunity members to move to a new insurance carrier before open enrollment ends on Feb. 15. Coventry Health Care is now the only insurer offering plans on the Iowa marketplace.

But even with a new health plan, Iowans and Nebraskans could potentially be out a great deal of money. Grassley pointed to an Iowa couple who had insurance through CoOportunity and had already met their out-of-pocket maximums for the year after the husband had emergency surgery in early January.

But because the couple has moved to another insurance company, the two could lose credit for those payments and be out thousands of dollars, Grassley said, because their new insurer won't have to recognize them.

'They're in this situation, as I see it, because CMS ignored the warnings,” he said.

Burwell said consumers are the agency's No. 1 priority.

'As we've worked through this, we are focused on the consumer,” she said.

CMS said in January that 'CoOportunity's last request for funding was greater than all the resources that CMS had available.”

Grassley told reporters on a conference call later in the day that while he took heart in Burwell's commitment to looking into the problem, it still needs to be fleshed out.

'That may not amount to anything,” he said.