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House Committee Approves Bill Responding to Co-Op Failures

The House Ways and Means Committee on Thursday approved a GOP bill that responds to the failure of about two-thirds of the co-op insurers created under the Affordable Care Act.

The bill, which passed by a voice vote, would exempt people who lost insurance because the co-op through which they bought coverage folded mid-year from the Affordable Care Act’s individual mandate.

Roughly 750,000 families have had their coverage disrupted by the closure of 16 of the 23 co-ops created under the 2010 health care law, all citing financial problems, Committee Chairman Kevin Brady (R-Texas) said during the hearing. The bill would exempt consumers from the individual mandate for the remainder of that year, and they would be required to sign up for coverage during the next enrollment period.

“As we work to turn our plan into legislation, it’s only right to offer immediate relief from this tax penalty to Americans who lost their insurance — or lose it in the future — due to the colossal failures of the co-op program,” Brady said in his opening remarks.

Three co-ops have closed in the middle of this year, leaving consumers to sign up for new plans. Two co-ops closed mid-year in 2015. Republicans said that often means people have to start over in paying deductibles for their new plan, as their previous payments don’t always get credited.

Democrats noted that people whose plans are ended mid-year because of a co-op’s closure are able to sign up for a new plan during a special enrollment period. But their opposition to the bill had less fervor than their typical opposition to the GOP response to the Affordable Care Act. Largely, Democrats said the bill wasn’t ready to head to the floor, in part because it’s unclear who the bill helps.

“This bill isn’t going to hurt anything,” said Rep. Jim McDermott (D-Wash.). “We don’t know who it’s going to help, if it hurts anybody. It’s a good campaign issue.”

The Department of Health and Human Services wrote in a letter to ranking member Rep. Sander Levin (D-Mich.) that consumers affected by a closing co-op are contacted at least 20 times about the special enrollment period in which they can purchase a new insurance plan.

Levin said that people affected by the co-ops already have opportunities to renew their coverage, and people who are eligible for hardship exemptions after the co-op they were covered by fails can already get an exemption from the mandate.

Rep. Xavier Becerra (D-Calif.) said the bill as written was a “blanket shot” that could harm the individual mandate. He suggested a bill to prevent people from having to start over paying their deductibles mid-year would easily pass.

“I think there’d be a lot of support in Congress to deal with folks like that because they did the right thing, and it’s not their fault if an insurer was able to sustain itself and had to go under,” Becerra said.

Mike Long, a spokesman for House Majority Leader Kevin McCarthy (R-Calif.), said it was too soon to say whether the bill would come to the floor for a vote.