Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Obamacare Insurance Plans Collapsing

The largest Obamacare health insurance plan in Colorado has been shut down by the state because it did not have enough money to cover the policies it issued.

Colorado HealthOP was the largest insurer on the state’s Obamacare exchange, with 82,785 policies issued when it closed down on October 16, 2015, just three weeks before open enrollment began, the Associated Press reported. The plan shut down because state regulators banned the sale of its policies because they did not meet the minimum requirements under state law.

This is very bad news because Colorado HealthOP issued around 40% of the policies sold through Colorado’s Obamacare exchange, The Denver Business Journal reported. The policies were illegal because the company lacked the funds to cover them. Colorado HealthOP was apparently depending on a $16.2 million payment from the Centers for Medicaid and Medicare to cover a shortfall in its budget. When the Centers sent it a check for $2 million instead, it had to shut down.

This means that all the people covered by Colorado HealthOP’s plans will have to find new coverage by January 1, 2016. It is not clear what alternatives will be available on Colorado’s Obamacare exchange, Connect for Colorado, or if Colorado HealthOP’s customers will be able to afford them. A number of health insurance companies have recently pulled out of Connect for Colorado.

Obamacare Collapsing All Over the Country

The truly frightening aspect of this plan is that people in Colorado are not alone. Even though the media has tried to ignore it, four co-ops or nonprofit Obamacare health insurance plans collapsed during the week of October 11–17 alone, The Washington Post reported.

Around one third of the innovative health insurance plans created under Obamacare will be out of business as of January 1, 2016, The Post reported. One reason why this is occurring is that the U.S. Department of Health and Human Services can only pay around 12.6% of the $3 billion needed to finance the plans.


What’s truly disgusting is that those plans cover those most in need of health insurance: sick, poor and unhealthy individuals with higher medical bills. They take part in so-called risk corridors designed to cover people other companies will not touch.

This means a large number of Americans will go to the Obamacare exchanges and find no plans that they can afford. That means Obamacare is officially a dismal failure; it is not achieving its basic goals. The Daily Signal estimated that plans covering around 420,000 people had collapsed as of October 15, 2015; that figure did not include the Colorado HealthOP plans.

Obamacare Plans That Have Collapsed

Here’s the list of Obamacare plans that have collapsed in recent weeks:

  • Louisiana Health Cooperative
  • Health Republic Insurance of New York
  • Nevada Health Cooperative
  • Cooportunity (a plan in Nebraska and Iowa)
  • Health Republic Insurance Company of Oregon
  • Kentucky Health Cooperative
  • Community Health Alliance in Tennessee

My suspicion is that this is just the tip of the iceberg. We are sure to see even more plans closing in the coming weeks. One has to wonder about even larger plans in populous states like California.

I also have to wonder what will happen if a plan shuts down after it starts selling policies on the Obamacare Exchange. Remember, open enrollment for Obamacare begins on November 1.

This means that millions of Americans could be left without health insurance come January 1, 2016—a development that is sure to have some interesting repercussions in next year’s elections.

Obamacare’s Woes Bernie Sanders’ Gain

Interestingly enough, the biggest beneficiary of the latest Obamacare debacle might not be Republicans; it could be social democrat and presidential candidate U.S. Senator Bernie Sanders (I-Vermont). The reason for that is simple: Sanders supports single-payer or government-issued national health insurance.


The inability of these private exchanges to stay in business without government support makes the case for single payer. The private health insurance industry and charities are proving themselves incapable of covering the poor and the sick. Meanwhile, Medicare seems to work, and so does Medicaid.

In Colorado, where I live, Medicaid, which offers $1 prescriptions and $5 copays for services, is a better deal than Colorado Connect plans, some of which have a $300-a-month premium. A sick working-class Coloradoan would be better off quitting his or her job and going on Medicaid than signing up for the exchange.

That’s a horrendous situation, but it is better than that facing Americans in 19 states who do not have that terrible option. Note: It is also a reality that Democrats refuse to talk about because it makes them look like idiots.

Obamacare Is a Miserable Failure

That’s a horrendous situation, and it is worse in the 19 states that refused to expand Medicaid. In those states, most poor people still have no coverage. That means around 1.253 million poor people in Florida and 1.186 million poor people in Texas still have no health insurance, according to Families USA.

That makes Obamacare a miserable failure, and things could get worse in the future. Under a U.S. Supreme Court ruling, a state can decide to simply opt out of the Medicaid expansion at any time. If Republicans win control of the legislature and governor, they could simply vote to reverse Medicaid expansion and leave the poor without coverage.


The bitter truth, which neither the media nor the Democrats are willing to face, is that Obamacare is a miserable failure. It needs to be repealed or drastically changed now.

Democrats Face a Difficult Choice

The failure of Obamacare will leave Democrats with a difficult choice next year. They will either have to defend a failed program and look like complete fools or find an alternative.

That benefits Bernie Sanders and other single-payer advocates because they have an alternative: one that works, as the success of Medicare and Medicaid demonstrate. It will leave mainstream Democrats with a difficult choice: either turn on one of their party’s signature programs, one promoted by a popular president, or defend the indefensible.


The only thing that could save the Democrats at this point is the sheer ineptitude of the Republicans. Since the GOP candidates are too busy trying to destroy each other, they cannot take advantage of the tremendous opportunity that Obamacare’s failure is providing them.

No matter what happens, one thing is obvious: Obamacare is going to have to be drastically reformed just to survive. My prediction is that Obamacare will completely collapse within the next three years and force Congress to adopt single-payer healthcare nationwide whether it wants to or not.

“You can always count on Americans to do the right thing—after they’ve tried everything else.”

–Sir Winston Churchill