CO-OP Consumer Protection Act of 2016

Floor Speech

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Mr. SMITH of Nebraska. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 954, the CO-OP Consumer Protection Act.

H.R. 954 is a simple bill rooted in fairness. If you are a consumer who complied with the Federal mandate to obtain health insurance coverage and your coverage was terminated midyear because the Consumer Oriented and Operated Plan, or CO-OP, you bought your plan from collapsed, you shouldn't be liable for the individual mandate penalty for the remainder of that calendar year.

I don't need to spend a lot of time on the history of the CO-OP program, but just very briefly, more than $2 billion, largely in the form of low-interest, startup, and solvency loans, was distributed to approved CO-Ops under the ACA.

Now, 17 of the 23 CO-Ops, which received more than $1.7 billion of those dollars, have closed or are in the process of closing, with the remaining six also struggling to remain solvent.

The 17th CO-OP to announce its closure was Health Republic of New Jersey, which announced it would be winding down prior to the 2017 plan year 2 weeks ago, just days after we marked up this bill in the Ways and Means Committee.

The first CO-OP to close was CoOpportunity Health, which sold plans covering 120 Nebraskans and Iowans in 2014 before being taken over by the Iowa Department of Insurance late that year.

While health providers in Nebraska and Iowa were made whole for services provided to CoOpportunity planholders through the States' guaranty funds, consumers, and the remaining insurers in the two States are now paying back the guaranty funds for those costs.

Similar situations have played out in other States covered by collapsed CO-Ops, including States like New York, Oregon, Ohio, and Illinois, where planholders lost coverage midyear.

When CoOpportunity collapsed, I heard from nearly 300 constituents with concerns about what this loss of coverage meant to them and their finances. The vast majority of these people wanted to have health insurance coverage and did buy new coverage, but were concerned a brief lapse would still lead to them paying a penalty.

The other side will tell you this bill is unnecessary because these people were provided a special enrollment period and could already apply for a hardship exemption. Most Nebraskans took advantage of that special enrollment. I still heard from many of them that the likelihood of accidentally incurring a tax penalty was at the front of their minds during this period of time.

There are already more than 20 exemptions to the individual mandate in the law. Those who lost insurance through no fault of their own after doing their best to follow the law and whose unique circumstances led them not to seek new coverage for the remainder of the year should not be forced to file additional paperwork and rely on the opinion of a bureaucrat to ensure they aren't subject to a tax penalty. And they certainly shouldn't have to worry about this additional tax, while also searching among very limited options for a new insurance plan.

Mr. Speaker, I acknowledge there is broad disagreement about the individual mandate. This bill isn't about that. It is about ensuring a small fraction of consumers in a small number of States who did their very best to comply with the law don't have to worry about the threat of a tax penalty. It is also about ensuring if any remaining CO-Ops are terminated midyear in the future that those consumers have one less concern than Nebraskans had last year.

Mr. Speaker, I reserve the balance of my time.

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Mr. SMITH of Nebraska. Mr. Speaker, I certainly will reflect briefly on the comments of my colleague across the aisle who says that all of the problems have been worked out, that all the provisions have been met, and that anyone who lost their coverage, through no fault of their own, would find an exemption or a consideration from the bureaucracy.

I just want to say that Americans who have lost their coverage certainly deserve certainty that they won't be subject to the penalties when they lost their coverage, and not just promises that the Federal Government might take into consideration their situation.

There had been many characterizations of how easy enrollment would be some time ago. It hasn't worked out that way.

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Mr. SMITH of Nebraska. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would like the Record to reflect that hearings have taken place that have included the subject matter of the CO-Ops. In fact, I recall the chief of staff from HHS came before the Ways and Means Committee, and we had a rather extended discussion on the CO-Ops, CoOpportunity Health, and the numerous others that have failed; but, more importantly, it is crucial to establish the record on the risk corridor.

The gentleman from Washington stated that it is Republicans who designed this to fail. Number one, Republicans are not responsible for the design of any part of this. Interestingly enough, we were told by the administration, and, in fact, the administration is on record, that the risk corridor program was intended to be operated on a revenue- neutral basis, that is, risk corridor payments would be offset by payments collected by other insurers. Congress simply acted, and I would add, on a bipartisan basis to codify that very statement.

In fact, I include in the Record an April 2014 memo from CMS, from Centers for Medicare and Medicaid Services, explaining how risk corridor funding would be prorated if receipts were insufficient to meet requests.

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Mr. SMITH of Nebraska. Mr. Speaker, I yield myself such time as I may consume.

We need a healthcare plan that involves patients and their providers.

We need a healthcare plan and healthcare coverage--insurance, if you will--that is a product that is purchased by millions of Americans on its own merit, not because of the heavy hand of the Federal Government's imposing fines and penalties even upon those Americans who are doing everything they were supposed to be doing so as to be responsible citizens in taking care of themselves.

What is clear from the debate today, Mr. Speaker, is that, in the face of the failures of the ACA or ObamaCare, whichever label you might wish to attach to it--and there are certainly many failures of the plan--the administration and my colleagues across the aisle continue to advocate for the individual mandate at all costs, no matter how negatively this might impact a law-abiding individual who seeks to do the right thing.

Mr. Speaker, during the markup of this bill in committee, a supporter on the committee referred to the law as a ``work in progress.'' I would say that that is a generous description of the law. If it is truly a work in progress, why would we penalize Americans--through no fault of their own for losing coverage--with fines that run hundreds, if not thousands, of dollars?

We are persistently told that our only desire is to take away health insurance coverage from Americans and that we have no constructive ideas for improving the healthcare system. This bill is one small way to improve the healthcare system.

It is interesting that this bill has been characterized as an effort to undermine the ACA. Is that how weak the ACA is in that a small, narrowly crafted bill like this would undermine the entire thing? I doubt it. This is a small effort to help innocent Americans who have lost coverage through no fault of their own. We should not penalize them and create a financial hardship additionally for them than they have already been experiencing.

I urge all of my colleagues to join me in providing this small issue of fairness.

Mr. Speaker, I yield back the balance of my time.

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