Insurance Startups Learn to Not Rely on Obamacare

Four taxpayer-funded Obamacare insurers in the last week have said they will close up shop, partly blaming a lack of support from the Obama administration.

For the remaining publicly owned insurance cooperatives, not relying on more government funding has been a key strategy for staying afloat.

Back in 2014, before the first Obamacare open enrollment period, the administration helped establish 23 co-op insurance startups. The goal was to provide more competition for the marketplace exchanges where enrollees buy insurance.

But nearly a third have dropped out, with 15 co-ops remaining.

Some of the co-ops said a major reason for some of the closures was a lack of money from Obamacare’s risk corridor program, created to help insurers cover the cost of taking on more sicker, older Americans. The program expects insurers who get high profits to pay in to the program, and it pays out to insurers that suffer losses.