Gold, the co-founder, said that without a $112 million federal loan through Obamacare, CoOportunity would have difficulty growing to the size where it can spread risks and costs among enough people to succeed.
The loan gives the company the financial backing it needs to begin selling policies and paying claims, and is due to be repaid to the federal government. The Affordable Care Act contained $6 billion in loans to establish other cooperatives around the country.
Because the new law requires insurers to spend 85 percent of premiums from large-group policies on health care claims, he said, it's almost impossible for a publicly traded health insurance company to pay its administrative costs and still make a profit that appeals to investors.
“You don't see for-profit companies starting in the insurance business any more,” Gold said. “That's why the ACA seeded nonprofit cooperatives to provide competition in a market that's increasingly less competitive.”
So if I understand this correctly, the architects of Obamacare knew the law would reduce competition and decided to correct for that by providing government money to create new competition. They deliberately destroyed what little was left of the sellers’ side of a market in health insurance then tried to artificially recreate it. Is it just me or is this slightly insane?