A Lewiston-based non-profit health insurance cooperative has reduced its losses for the July-September period compared to last year, it has been reported.
Community Health Options (CHO) has reported $3.3 million in losses for the third quarter of 2016, as compared to $17.3 million over the same period last year, Portland Press Herald
The insurer posted a staggering $31 million financial loss last year as a result of an unexpected flood of claims from clients who sought medical care for long-delayed conditions. This prompted CHO to set aside $43 million in reserve to cover potential losses in 2016.
In order to stem CHO losses, the Maine Bureau of Insurance considered putting the insurer into receivership as part of the plan to end as many as 17,000 policies, but this plan was blocked by the federal government, which requires customers continue to be covered, the report said.
According to Portland Press Herald
, the next few months will be critical for CHO because it was during the last half of 2015 that the cooperative saw mounting losses from thousands of CHO policyholders who sought medical care.
In a statement issued earlier this month, the bureau said CHO’s performance for the first nine months of the year was generally consistent with the plan it developed; but said the cooperative’s fourth quarter results will have a “significant impact” on its ability to meet the 2016 full year target.
The bureau noted, for instance, a need to see whether there will be an increase in claims in the last three months of the year, whether CHO can recover some of the claims it pays from its reinsurance coverage, and if the insurer’s expenses can be kept under control, the report said.
The bureau also noted that paid claims rose 30.5% over expectation in September, but attributed it to “an increase (in) the velocity of claim payments” and outstanding claims dropped in August. The bureau also said that CHO’s claim count, submitted claims, estimated claims, and average net submitted claims were all at the lowest month levels for the year in September, Portland Press Herald
CHO’s finances could be impacted by the lawsuit it filed against the federal government which seeks to recover some $23 million under a program designed to help offset losses suffered by insurers. CHO paid into the program in 2014, and argues that it should receive payment because of its 2015 losses, the report said.
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