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More than 400,000 Americans are now without health coverage as the insurance cooperatives created under the Affordable Care Act continue to fail.

Two more co-ops closed their doors this weekend – the Kentucky Health Cooperative, which served 51,000 members, and Health Republic Insurance of New York, with 215,000. The announcements follow those of CoOportunity Health in Iowa and Nebraska, the Louisiana Health Cooperative and Nevada Health Co-Op.

Health Republic Insurance of New York was the largest of the ACA nonprofit cooperatives, and was shut down by regulators after losing roughly $52.7 million in the first six months of the year. That is on top of a $77.5 million loss in 2014, according to regulatory filings.

 Deep Banerjee, an analyst with Standard & Poor’s Ratings Service, blamed the shut down on insufficient premiums that did not cover members’ health expenses and its own costs of operations.

“They are paying out in claims and expenses a lot more than they are getting in the door,” he told the Wall Street Journal.

Kentucky Health Cooperative, meanwhile, was the second-largest co-op in the country and insured 75% of Kentucky residents who enrolled in coverage. The organization had been awarded $146.5 million in taxpayer loans for its launch, including $65 million in solvency funding as recently as November of last year.

Premiums had been set to increase more than 20% for the 2016 open enrollment season, and CEO Glenn Jennings had requested $77 million from the risk corridor program in order to maintain solvency after a series of significant losses.

However, news arrived Friday that the co-op was to receive just $9.7 million in risk-protection payments and the co-op opted to cut its losses and fold.

“Today’s news regarding the wind down of Kentucky Health Cooperative is a direct result of lower-than-promised risk corridor payments that were announced last week,” Kelly Crowe, CEO of the National Alliance of State Health CO-OPS, said Friday.

Kentucky Senator and Senate Majority Leader Mitch McConnell, meanwhile, laid blame to the co-op program as a whole.

“Barely a week goes by that we don’t see another harmful consequence of this poorly conceived, badly executed law,” he said. “Despite repeated Obama administration bailout attempts, this is the latest in a string of broken promises with real consequences for the people of Kentucky who may now be losing the health insurance they had and liked twice within the last three years because of Obamacare’s failures.”

The news comes after a federal audit revealed in August that 22 of the 23 insurance cooperatives established under the ACA are losing money and facing difficulty repaying federal loans. Five of the 23 have now closed their doors, and 11 have received warning letters from the Centers for Medicare and Medicaid Services placing them on “enhanced oversight.”

Independent health insurance agents have been wary of health co-ops from the start. One broker in Nevada told Insurance Business America in 2013 that while the state co-op consistently came in with the lowest-priced plan, he believed the rates would inevitably rise as claims were registered, leaving insureds with a plan far more expensive than what they had counted on.

“Everything being equal, if it’s too good to be true, it usually is,” he said. “They might be attractive now, but down the road, they’re going to be very unattractive.”

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http://www.ibamag.com/news/healthcare/two-largest-obamacare-coops-fold-400000-left-without-insurance-25667.aspx

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