Ky. co-op blames inadequate risk-corridors funding for closure
Kentucky Health Cooperative will end operations by year-end, forcing 51,000 Kentuckians to find new health coverage during the next open-enrollment period. It’s yet another casualty of the Affordable Care Act’s politically contentious co-op program.
A major factor behind its demise, according to the insurer, was low payments from the ACA’s risk-corridors program, which could force more coops to close in the near future.
The law established the temporary risk corridors as a way to cap winners and losers during the early run of the ACA’s insurance expansion. Earlier this month, the CMS said it would pay only 12.6% of requested risk-corridors payments. For Kentucky Health Cooperative, that meant it would receive only $9.7 million from its request of $77 million. The co-op was collecting far less in insurance premiums than it was paying out in medical claims.
“In plainest language, things have come up short of where they need to be,” Glenn Jennings, Kentucky Health Cooperative’s interim CEO, said in a written statement.