Half of the failed Obamacare health insurance co-ops are not covered by a 33-year-old guaranty program designed to protect consumers when an insurance company defaults, according to a Daily Caller News Foundation investigation.
The Guaranty Association program, an insurance program to protect consumers in the event of an insurance company default, was established in 1983. The program provides financial coverage to people who enroll in a health insurance program, and pays up to $500,000 in medical costs if an insurance company becomes insolvent.
But a source familiar with the highly guarded guaranty system told TheDCNF “about half of the co-ops are likely not to be guaranty member companies and thus not covered.”
If a co-op is not part of a state-managed guaranty program, only its liquid assets count as the source of available funds for medical expenses. There are no other sources to reimburse patients or care providers, such as doctors.