Grassley says Congressional Hearings Possible on Co-Opportunity

Jan 23, 2015

Republican Senator Chuck Grassley of Iowa wants details of Co-Opportunity Health's collapse and isn't ruling out congressional hearings.

UPDATE 1/23 12:25  

The Iowa Insurance Commissioner, as the court appointed rehabilitator for CoOportunity Health, has determined that rehabilitation of CoOportunity Health is not possible and will ask the court for an order of liquidation. 

CM: It’s Morning Edition on Iowa Public Radio. Good morning, I’m Clay Masters. Co-Opportunity Health - the Iowa health insurer set up with federal loans under the Affordable Care Act may soon be liquidated. The Centers for Medicare and Medicaid have extended 146 million dollars since it was set up but did NOT extend them money they were expecting…. Now the state has taken it over. Iowa’s Senior US Senator Republican Chuck Grassley wants to know more and he’s with me from his office in Washington. Good morning, Sen. Grassley.

CG: Good morning, I’m glad to be with you. And my involvement is this as a member of the Senate finance committee and jurisdiction over this program which is part of the healthcare reform act I want to know how our taxpayer’s money is being handled. In this particular case we loan money that’s never going to get back. Not the fault of Co-Opportunity. But the fault of CMS probably not following through until this organization was mature                                                                                                                                        

CM: In a written statement from a CMS spokesman to Iowa Public Radio… the explanation they provide  is that the total funding requests from these co-ops in the fall exceeded the amounts of funds available to make loan awards. So – limited funding – they said they prioritized… and Iowa wasn’t one of them. That explanation is not sufficient?

CG: It’s funny… first of all you’ve gotten some language from CMS that I have not. I have not had an answer to my letter yet. I’m a little surprised they would give you some information that they don’t give me. But let me suggest this in answer to your question that it’s not satisfactory because this is a beginning organization and I’ve seen CMS and HHS divert a lot of money from one part of healthcare reform to another and I wouldn’t take that explanation as a satisfactory expiation for me.

CM: Now these co-ops were set up to create competition in places where there wasn’t much. Early on many thought Wellmark would sign up to be a part of the exchange. Do you think things would have played out differently had the pool been spread out more?

CG: The answer is yes.

CM: Are you hoping to take this further – hold congressional hearings once you get an answer from them?

CG: Well, It depends on what that answer is and it also depends upon what Chairman Hatch who took over chairmanship for me because I’m chairman of the judiciary committee, what he would decide to do. But my policy when I was chairman of finance or any chairmanship is hearings are always a last resort but they’re also a shotgun behind the door, so that if you don’t get the cooperation you want from your letters and from every phone calls and every other way you try to get information from the administration. Yes, I would suggest hearings to Senator Hatch. But right now I’m going to reserve judgment

Now you didn’t ask me but let me say the purpose of our interest in this doesn’t deal just with Co-Opportunity because I think it’s fair to assume that there’s no Co-Opportunity anymore. But there’s 30 to 35 other co-ops around the country and these co-ops including Co-Opportunity got loans from the federal government to get started. And those loans were going to be repaid. So our interest is how is CMS handling this with Co-Opportunity so that we know that we don’t run into the same situation with the other 30 to 35 co-ops around the country because we were to run into the same situation with them that we do with Co-Opportunity then there’s no chance of ever getting the loans paid back. In other words the loans are based upon the cash flow of the co-ops and that’s how we get the taxpayer’s money back. So I’m interested preserving the records with Co-Opportunity. I’m asking the state of Iowa, asking CMS to preserve the records so we can find out what went wrong with Co-Opportunity. Because they thought they were going to get some further help from the department. They didn’t get it. They go under. We lose the taxpayer’s money. We’re interested to find out what went wrong to make sure the thing doesn’t go wrong with the other co-ops and so we get our money back.

CM: Taking a step back and looking at more “big picture” items within the Affordable Care Act – what do you think will happen the Supreme Court Case that could potentially invalidate tax credits in three dozen states where the feds run the program?

CG: Well, I’m going to talk in what common sense would tell me. I’m not sure that the Supreme Court uses just common sense. But it’s very clear the way the language was written that exchanges that were federal in a state, and that’s about I don’t know 35 states or so I think, that the subsidy does not go to federal exchanges, just to states that set up their exchange. And that was very intentional by the Democrats that wrote Obamacare. They thought it would force states to set up state exchanges. So it seems to me the clear reading of the law is that the subsidy does not go, not only does it affect the subsidy but it affects the individual mandate. So you ask me what happens if the Supreme Court as I suggest that they should rule it opens up for negotiations between the president and the Congress how you’re going to take care of the subsidy for the states that have exchanges and what else other changes should be made to Obamacare because even the president has made very clear that Obamacare isn’t the perfect piece of legislation that he thought it was because he’s made 38 changes in it by executive order. Some of them probably illegal or unconstitutional. But probably some of them he had the authority to do.

CM: So with the new Republican majority congress what do you see as some of the key things to do in chipping away at the Affordable Care Act?

CG: Well, it’s a case of going back to what was our intent when it was written and passed even for those of us that voted against it. Some of these changes the president made like delaying the corporate mandate for two years as an example. The law clearly said it was supposed to go into effect January 1st 2014 – he delayed it. Those are changes that need to be made.

We should review the individual mandate as well. Because this is the first time in the history of the country that the federal government said, I’m saying federal government not state government because it’s different in the case of state government, this is the first time that the federal government has said you gotta buy something. They may’ve always said there’s things you can’t do but this is the first time they’ve said you gotta do something you maybe don’t want to do.

CM: Do you think it should be repealed?

CG: We’re going to vote for repeal but the president’s going to veto it. So we’re not going to pass it over his veto so there’s not going to be any repeal of it. But we’re going to vote to repeal because that’s what we promised the people in the election. And if you win an election you ought to carry out your promises. So then you get back to the more realistic things that can be done if the president agrees that some changes  need to be made and we feel when the subsidy for federal exchanges goes away under court decision then that’s an opportunity to make these changes. Hopefully our intention is to do it in a bipartisan way.

CM: Senator Chuck Grassley. Thanks as always for talking with us this morning.

CG: Yeah, thank you very much. Glad to be with you.