Obamacare Co-op fails: This is what you could do with the money lost!

Today there is more fallout from the collapse of a New York state insurance Co-op set up to offer health insurance as part of the Affordable Care Act.  Health Republic Insurance ceased to exist today and has left a whole bunch of people (okay, a few more than a bunch - 200,000 patients!) without insurance.  

If you have been following my posts on the ACA and music therapy (just type in Obamacare into the search box for a list of articles), you may remember that the insurance co-ops are joint ventures with a given state and the federal government that acts like an insurance company to offer insurance plans on the state exchanges.  

Of the 23 co-ops set up around the country, 12 of them have gone bankrupt this year.  Part of the problem is that these co-ops set artificially low prices for monthly premiums on their insurance plans.  There was a fund set up by the federal government to reimburse these co-ops for the first few years until their subscriber pool became stabilized with the right mix of young and old, and sick and healthy customers.  Unfortunately for the co-ops, this pool of money has been cut back and it will not be able to bail out the co-ops as originally intended.

So this brings us back to the most recent failure: Health Republic Insurance.  The news reports that $265 million dollars in federal loans has virtually disappeared through this company!  Hospitals and doctors that offered services to patients on this health insurance do not expect to get reimbursed for any of the services they have rendered.

So I did some quick calculations based on the 2014 workforce analysis by the American Music Therapy Association and came up with the following as a better use for the wasted $265 million dollars:

• $265 million would have paid for 4,152,954 hours (yes, that is over 4 million hours!) of direct music therapy services at the average hourly rate of $63.81/hour for 2014!
• $265 million also would have paid the average yearly salary of $50,808 for 5,215 music therapists! 

 I don't know about you, but I think the money would have been much better spent on music therapy!  And that is only one of the 12 failed co-ops this year.  Only one co-op out of 24 did not lose money in 2015.  I guess I should keep my calculator handy for next November!