Almost one third of the non-profit health insurance plans created under President Obama's Affordable Care Act (ACA) will be shuttered by year-end, with a closure rate of one per week over the last month. The latest casualties came Friday with news that co-ops in Oregon and Colorado are closing, bringing the count to eight of the 23 still operating a year ago.
But it looks like there is still more to come, with reports Monday suggesting that Federal officials have a list of 11 Obamacare health insurance co-ops on the verge of failure. However, the list will not be disclosed to the public or to Congress.
State regulators on Friday called for the closure of Colorado HealthOP, announcing plans to decertify it from the insurance marketplace, despite the co-op's claims that it would turn a profit in 2016.
CEO Julia Hutchins has vowed to fight the shutdown directive, although it is not clear how she will do so. The co-op has more than 80,000 members.
There was a similar scene in Oregon, where Health Republic Insurance, one of two insurer co-ops created in Oregon under ObamaCare, said it is shutting down.
The operation will continue to pay claims through the rest of the year but won’t sell policies for 2016. The co-op serves 15,000 individuals and 800 small businesses.
Health Republic blamed its failure on a reduction in federal payments, claiming it is receiving less than 13% of the money expected at its inauguration.
The news brings the current toll to eight out of 23 in total, with many of them citing the same challenges as Health Republic. Co-ops in Tennessee and Kentucky have also closed in the last month, after the federal government revealed it would pay out much less than anticipated through the “risk corridor” program meant to subsidize insurers who take on high risk customers.
It is now thought that nearly half a million customers of failed and failing co-ops will have to find new coverage in 2016, and that number may grow before the year is out.
News reports on Monday quoted a spokesman from the federal Centers for Medicare and Medicaid, which manages the Obamacare program, as saying that a further 11 as yet unidentified co-ops are now on “a corrective action plan” or “enhanced oversight”, with the CMS demanding they take urgent action or face closure. The CMS does not plan to release names of those businesses affected.
The ACA’s third open-enrollment season begins November 1.
