Elizabeth Harrington reports for the Washington Free Beacon on financial shenanigans used to help prop up struggling Obamacare co-ops.
Co-ops created under Obamacare reported net assets despite losing millions because they used an accounting trick approved by the Centers for Medicare and Medicaid Services.
Tax filings for 18 co-ops, including nine that collapsed in 2015, also revealed that co-op CEOs were paid handsomely before many had to shut down.
In July 2015, the Centers for Medicare and Medicaid Services amended its agreement with co-ops, allowing them to list $2.4 billion in loans they received from taxpayers as assets.
“This notice is to inform you that the Centers for Medicare & Medicaid Services (CMS) will now allow co-ops to request that surplus notes be applied to Consumer Operated and Oriented Plan (co-op) Program start-up loans,” the agency said in a notice to co-op project officers. “Applying surplus notes to the startup loans will enable co-op borrowers to record those loans as assets in financial filings with regulators.”
Citizens Against Government Waste, a nonprofit that seeks to eliminate inefficiency in government, said the notice permitted Obamacare co-ops to use fuzzy math to mask their true financial situation.
“Taxpayers expect to hear the truth about Obamacare’s co-ops,” Curtis Kalin, the group’s spokesman, said. “It is unconscionable that CMS attempted to obscure the financial disaster the co-ops have become through gimmicks and loopholes.
“The fact that failed co-op CEOs received bonuses is ethical salt in a festering fiscal wound,” he said.
Though 21 of 23 co-ops lost money in 2014, most listed net gains on their 990 forms filed with the IRS. Additionally, CEOs were paid well over six figures, including the Health Republic Insurance of New York, which paid its president and CEO $427,000.
