Profitable Affordable Care Act Insurance Co-op Now Losing Millions
The House reconvened at 9 AM today.
Today, the House is expected to vote today to agree with the Senate conference Report on the following bills:
H.R. 644 - "To reauthorize trade facilitation and trade enforcement functions and activities, and for other purposes.
H.R. 2250 - "Making appropriations for the Legislative Branch for the fiscal year ending September 30, 2016, and for other purposes."
When the House recesses this afternoon, their next meeting is scheduled for 12:00 p.m. on Tuesday, Dec. 15, 2015.
Americans for Limited Government President Rick Manning today issued the following statement thanking 32 House Republicans who signed onto a letter by Rep. Tom Marino (R-Pa.) and Rep. Sean Duffy (R-Wis.) urging House leaders to include a rider in the omnibus spending bill for the remainder of fiscal year 2016 that would prohibit the use of funds to award monies from legal settlements to third party activist groups:
"The $17 billion Bank of America settlement is a perfect example of the misuse of settlements as Bank of America was required to give millions of dollars to third party activist groups. Legal proceedings by the government must never be used as shakedowns to enrich the coffers of any political cause, regardless of ideology."
More news reports on Affordable Care Act:
The AP, reports, “The lone health insurance cooperative to make money last year on the Affordable Care Act's public insurance exchanges is now losing millions and suspending individual enrollment for 2016.
“Maine's Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year. A spokesman said higher-than-expected medical costs have hurt the cooperative.”
According to Maine Public Broadcasting, “Community Health Options says the freeze on new members is to ensure its future viability, but it comes at a time when co-ops across the country have shuttered.
“There are two factors that led to Community Health Options' decision to suspend enrollment in the online Marketplace about a month ahead of the Jan. 31 deadline. One, lots of new members, says CEO Kevin Lewis, and two, a marked increase in claims costs. ‘Really has led us to say, “OK, we're going to put our finger on the pause button, curtail additional enrollment for 2016, and then we'll see where we're at later in the year and then possibly reopen at that time,”’ he says. . . . The co-op has kept premiums in check, but as claims costs have risen, so has a deficit of about $18 million. .
“The viability of health insurance co-ops in general has been called into question in recent months, as 12 of 23 have failed. Co-ops were formed under the Affordable Care Act as nonprofit alternatives to private insurance companies.
“But this January, just one year after they first offered plans, rating agency A.M. Best found that 22 out of 23 had net financial losses. The only co-op that was doing well? Community Health Options.”
The AP, adds, “An Associated Press review of financial statements from 10 of the 11 surviving co-ops shows that they lost, on average, more than $21 million in the first nine months of this year. Those losses range from $3.9 million reported by Maryland's Evergreen Health Cooperative to $50.7 million booked by Land of Lincoln Mutual Health Insurance Co. in Illinois.
“‘Clearly the remaining health care co-ops are in dire circumstances,’ said Robert Laszewski, a health care consultant and former insurance executive who has been a frequent critic of the Affordable Care Act. ‘I don't know how any of them can survive another year.’ . .
“The cooperatives, like other health insurers, have been hit by soaring medical and prescription drug costs. Plus they've had to spend money building a network of care providers, negotiating rates with them and then marketing their plans to customers. They have also received considerably less financial support than they expected from a federal government program designed to support insurers as the exchanges got under way. . . .
“Established players also have struggled to sell coverage on the ACA's state-based health insurance exchanges, which are a key element behind the law's push to cover millions of uninsured people. UnitedHealth Group Inc. recently reported deep losses from its exchange business and said it would decide next year whether to even remain in the exchanges in 2017. . . .
“Maine's Community Health Options booked about $217 million in medical costs through the first nine months of this year, as its enrollment approached 71,000 people. Its costs so far this year are 72 percent higher than what the insurer recorded all of last year
“Spokesman Michael Gendreau said the company decided to freeze individual enrollment for 2016 in order to ensure ‘that we are able to provide the same level of care and service that we provided last year.’ He said the cooperative was not in danger of closing.”
That sounds a little like what happened in Utah during the fall. Back in October, The Salt Lake Tribune, reported “Utah's co-op, Arches, is the second-largest insurer on the state exchange, behind SelectHealth. . . . While Arches is not ‘out of the woods,’ President Nathan Johns said Thursday, the company will continue to offer a range of plans to individuals and families on and off the federal exchange.” Barely a week later, The Tribune was reporting, “Arches Health Plan, a membership cooperative that was born out of the Affordable Care Act and insures 66,000 Utahns, has been ordered out of the insurance market for 2016. . . . The Utah Insurance Department put Arches in receivership Tuesday afternoon . . . .”
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