Obamacare’s Co-Op Collapse Continues

Fewer Than A Third Of [Obamacare] Co-Ops Will Still Be Open For Business This Fall’

The Train Wreck Continues

“The number of insurers carrying out one of the Affordable Care Act’s most idealistic goals continues to plummet, with just seven nonprofit member-run health plans set to take part in the law’s fourth enrollment season this fall. That’s down from 23 such plans — co-ops, as they are commonly known — that started in 2014. Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will fold soon because of financial insolvency.” (“Fewer Than A Third Of ACA Co-Ops Will Still Be Open For Business This Fall,” Kaiser Health News, 8/01/2016)

Remaining Obamacare Co-Ops ‘Have Proposed Increasing Premiums’: “For the 2017 enrollment season, most co-ops have proposed increasing premiums, often by at least 10 percent.” (“Fewer Than A Third Of ACA Co-Ops Will Still Be Open For Business This Fall,” Kaiser Health News, 8/01/2016)

• “Montana Health, which lost about $40 million last year, has requested an average premium increase of 21 percent in Idaho and a 22 percent increase in Montana, [spokeswoman Karen Early] said.” (“Fewer Than A Third Of ACA Co-Ops Will Still Be Open For Business This Fall,” Kaiser Health News, 8/01/2016)

Four More Obamacare Co-Ops Collapsed This Summer, ‘Liquidating Amid Big Financial Losses’
“In Illinois, Oregon and Ohio, a combined total of about 92,000 people are being forced to find a new plan. A co-op in a fourth state, Connecticut, will last until the end of the year.” (“Frustration Mounts Over Obamacare Co-Op Failures,” The Hill, 8/01/2016)

OHIO: “Ohio is the latest state to lose its nonprofit co-op health insurer created under [the] Affordable Care Act after a Franklin County judge on Thursday appointed the Ohio Department of Insurance as receiver of InHealth Mutual to take control and liquidate the company.” (“Ohio Shutting Down State's Obamacare Nonprofit Co-Op Inhealth – Claims Paced $3M Per Week,” Columbus Business First, 5/26/2016)

• “Adjusted projections show InHealth Mutual would end the year with negative $20 million in assets if it were to continue to operate, according to the agency's complaint in Franklin County Common Pleas Court. . . [C]laims outstripped premiums by $28 million in the first quarter alone, according to its financial report filed with the agency. The state complaint said the adjusted projection of full-year losses jumped to $54 million.” (“Ohio Shutting Down State's Obamacare Nonprofit Co-Op Inhealth – Claims Paced $3M Per Week,” Columbus Business First, 5/26/2016)
• “InHealth . . . received a $16 million federal loan for startup costs, for which payments were to start in 2017, and a $113 million loan to cushion expected losses on premiums. It had withdrawn all but $2.8 million of the second loan.” (“Ohio Shutting Down State's Obamacare Nonprofit Co-Op Inhealth – Claims Paced $3M Per Week,” Columbus Business First, 5/26/2016)

ILLINOIS: “Land of Lincoln Health, an Obamacare insurer that launched three years ago to bring competition to the online exchange, is liquidating amid big financial losses. Dennis O'Sullivan, a spokesman for the Chicago-based start up, confirmed the insurer's closure.” (“Illinois Obamacare Plan To Fold After 3-Year Run,” Crain’s Chicago Business, 7/12/2016)

• “Land of Lincoln was among nearly two dozen co-ops born out of the Affordable Care Act to make the Obamacare exchange more competitive and lower prices for consumers and small businesses. . . Land of Lincoln, which has nearly 50,000 members, lost $90.8 million in 2015 and reported another more than $17 million in losses through May 31.” (“Illinois Obamacare Plan To Fold After 3-Year Run,” Crain’s Chicago Business, 7/12/2016)

OREGON: “The Oregon Department of Consumer and Business Services, Division of Financial Regulation on Monday will file a petition with Marion County Circuit Court to place Oregon's Health CO-OP in receivership in order to protect policyholders. . . As the receiver, the state intends to liquidate the troubled company's assets . . . For all of Oregon's Health CO-OP policyholders, plans will end July 31.” (Oregon Department of Consumer and Business Services, Press Release, 7/08/2016)

CONNECTICUT: “[Connecticut] Insurance Commissioner Katharine L. Wade announced today that based on hazardous financial standing, the [Insurance] Department has placed HealthyCT, a Consumer Oriented and Operated Plan (CO-OP), under an immediate order of supervision, which prohibits the company from writing new business or renewing existing business in Connecticut effective immediately . . . HealthyCT was formed in 2011 as a non-profit entity in Connecticut with the intent to participate in the Connecticut health care market as a CO-OP under the federal Affordable Care Act (ACA).” (Connecticut Insurance Department, Press Release, 7/05/2016)

FLASHBACK: ‘The Grim Announcements Keep Coming’ As ‘Nearly Half’ Of Obamacare Co-Ops Failed In 2015
“Just over half of the startups seeded with $2.4 billion in federal loans have collapsed because of financial difficulties.” (“Co-op Losses Nearly Doubled Last Quarter,” Politico Pro, 3/02/2016)

• “Co-ops collapsed in Arizona, Colorado, Iowa, Kentucky, Louisiana, Michigan, Nevada, New York, Oregon, South Carolina, Tennessee and Utah. The closures forced an estimated 700,000 individuals and small-business employees to obtain new insurance.” (“Republicans Question Viability Of Health Co-Ops,” The Wall Street Journal, 2/25/2016)

‘New Wave Of Failures,’ ‘Disrupting Coverage For Thousands,’ ‘Can Increase Patients’ Out Of Pocket Costs,’ ‘Lose Access To Doctors’
“A new wave of failures among ObamaCare's nonprofit health insurers is disrupting coverage for thousands of enrollees and raising questions about whether regulators could have acted earlier to head off some of the problems. Four ObamaCare co-ops have failed due to financial problems since the beginning of the year, the latest trouble for the struggling program.” (“Frustration Mounts Over Obamacare Co-Op Failures,” The Hill, 8/01/2016)

“The latest round of failures poses an even thornier problem than earlier cases because enrollees’ coverage is now being disrupted in the middle of the year. That can increase patients’ out of pocket costs and make it harder to keep the same doctors.” (“Frustration Mounts Over Obamacare Co-Op Failures,” The Hill, 8/01/2016)

• “The Obama administration acknowledges there are extra problems when a co-op shuts down in the middle of the year. At a Senate hearing in March, Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services (CMS), admitted that a co-op in Iowa and Nebraska, called CoOportunity, should have been shut down before it entered 2015. The co-op ended up failing shortly into the year. . . Now there's a similar situation in three other states.” (“Frustration Mounts Over Obamacare Co-Op Failures,” The Hill, 8/01/2016)
• “Having to switch plans in the middle of the year is a problem because it often means that enrollees need to start over on paying their deductibles, in effect increasing the amount they pay out of pocket for care. . . Another issue is that people can lose access to doctors if their new plan has a different network, a problem that Reat also cited with enrollees he works with.” (“Frustration Mounts Over Obamacare Co-Op Failures,” The Hill, 8/01/2016)

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