And why is this non-news to regular IB readers?
"CO-OPs are high-risk ventures: the Office of Budget and Management has projected a default rate for them as high as 43%. Through 2012 over $2 Billion had been distributed by HHS to these start up insurers."
Patrick published that prescient post almost two months ago (and tipped us to the latest news), and Mike had a related one a week earlier. The take-away is that, when one considers how much money has been thrown at these, and what they were expected to do, it would have been news if they'd succeeded.
And why is that?
Well, CO-OPs (short for Consumer Operated and Oriented Plan, which is both funny and creepy) were designed to funnel federal dollars to favored lobbying groups. Whether or not these organizations actually "delivered the goods" was irrelevant. Indeed, based on the the OBM's analysis, it was highly unlikely that that was even in the mix.
And how do we know this?
Follow the money:
"Half the co-ops the IG reviewed said they had no private support at all. The other half said their private funding amounted to less than 2 percent of their federal startup loans."
If these were really supposed to be serious and competitive players, then where were the big dollar private donors (eg Soros, Buffett, et al) to prop them up? Or, if you prefer, where were the private sector dollars and venture capitalists who really believed this was a viable business model in the ObamaTax environment?
Money talks, no?