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More CO-OPs in trouble


FierceHealthcare reports that some of “the few remaining consumer operated and oriented {health} plans (CO-OPs) have turned to reorganization in order to survive. But for one, even that strategy has run into trouble.”

CO-OPs,  created under the Affordable Care Act and with federal funding to get going,  were  to provide an additional coverage option on the individual marketplaces. “Yet they have struggled financially, and of the original 23, only a handful remain, including New Mexico Health Connections, Montana Health CO-OP, Mountain Health (of Idaho), Maine Community Health Options and Minuteman Health,” Fierce reports.

“One of the erstwhile CO-OPs, Maryland-based Evergreen Health, announced late last year that it would transition to a for-profit company owned by private equity investors in order to stay afloat.”

“That plan, which had received regulatory approval, unraveled last week after the insurer’s potential acquirers claimed new financial information surfaced that ‘raised significant concerns’ about the deal, according to the Baltimore Business Journal. Thus, the investment group—composed of Anne Arundel Health System, LifeBridge Health and JARS Health Investments—backed out.

“Following that development, the Maryland Insurance Administration announced that it had issued an order that bars Evergreen Health from selling or renewing any insurance policies.”

“While Evergreen’s bid to remake itself has failed, another East Coast CO-OP—Minuteman Health—is beginning its own transformation. The insurer, which serves customers in Massachusetts and New Hampshire, announced in late June that it plans to shed its CO-OP identity and transition into the Minuteman Insurance Company.” The organization has  since been put under state control.

“Both Minuteman and Evergreen have blamed much of their financial woes on being required to pay large assessments to the Affordable Care Act’s risk-adjustment program, which is supposed to help even the playing field for individual market insurers. In two separate lawsuits against the government, they argue that the program unfairly penalizes smaller, vulnerable insurers and benefits larger carriers.”

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