Sixteen Obamacare co-ops have now failed. Illinois announced that Land of Lincoln Health, a taxpayer funded Obamacare co-op, would close its doors, leaving 49,000 without insurance. The co-op now joins a list of 15 other Obamacare co-ops that have collapsed since Obamacare has been implemented.  Failed co-ops have now cost taxpayers more than $1.7 billion in funds that may never be recovered.

Co-ops were hyped as not-for-profit alternatives to traditional insurance companies created under Obamacare. The Centers for Medicare and Medicaid Services (CMS) financed co-ops with startup and solvency loans, totaling more than $2.4 billion in taxpayer dollars. They have failed to become sustainable with many collapsing amid the failure of Obamacare exchanges.

Since September, 13 Obamacare co-ops have collapsed, with only seven of the original 23 co-ops remaining.  Illinois’ Land of Lincoln co-op faced losses of $90 million last year and is suing the federal government for the deficit caused by Obamacare.  Co-ops across the country have struggled to operate in Obamacare exchanges, losing millions despite receiving enormous government subsidies.

The mass failure of co-ops should not be surprising. Larger insurance companies have also struggled to operate in Obamacare exchanges with many announcing they will stop providing coverage.

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