Collapsing co-ops spell trouble ahead
The trouble surrounding the Affordable Care Act’s co-op health insurance program is nearing disaster-level proportions. Last week, the Colorado Division of Insurance said it would close Colorado HealthOP, but the company plans on fighting the state’s decision, calling it “irresponsible and premature.” Then, Health Republic Insurance, one of Oregon’s two state co-ops, announced it was folding as well. That news came just days after Community Health Alliance, Tennessee’s co-op, voluntarily decided to close its doors. Eight co-ops have folded to date. (See Regionals, p. 6.)
The recent exodus is tightly linked to the federal government’s announcement that it will pay only 12.6% of riskcorridors’ claims.
The risk corridors program is one of three insurance programs built into the ACA that were designed to help stabilize the individual marketplace during its first few years. Insurers that enroll sicker, more expensive members request risk-corridors funding, while those that have healthier customers pay into the pool.
Risk-corridors payment requests ($2.9 billion) far exceeded what plans paid into the fund ($362 million) for 2014.