Col­laps­ing co-ops spell trou­ble ahead

Modern Healthcare - - LATE NEWS - —Bob Her­man

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.

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