Health insurance co-ops hit financial rocks
Two more non-profit health insurance businesses are facing closure, leaving thousands of policyholders to find new insurers for 2017.
HealthyCT in Connecticut has been placed under an immediate order of supervision by the state’s Insurance Department due to its “hazardous financial standing.”
Insurance Commissioner Katherine L. Wade announced Tuesday that the order, which stops the co-op writing any new business, has been made to protect 40,000 existing policyholders.
“Unfortunately HealthyCT’s financial health is unstable, having been seriously jeopardized by a federal requirement issued June 30, 2016 that it pay $13.4 million to the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services as part of the Affordable Care Act’s Risk Adjustment Program,” the Commissioner said. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain. This order of supervision provides for an orderly run-off of the company’s claim payment under close regulatory oversight.”
Individual policyholders will need to arrange alternative coverage for the 2017 plan year but will be fully covered until the end of 2016.
The Connecticut Insurance Department will work closely with HealthyCT, the state exchange Access Health CT, the broker community and other carriers to help large and small employers find new coverage when it comes time for them to renew their plan annually.
Meanwhile, Illinois-based Land of Lincoln Health has been ordered by the state’s Department of Insurance to stop renewing plans, selling new policies or make a $31.8 million payment as part of the federal risk adjustment program.
Chicagobusiness.com reports that the co-op is owed $73 million by the federal government which it took to court last month. The insurance regulator believes that if the co-op makes its liability payment before the money it’s owed is received, it would result in immediate liquidation.
Brokerlink buys Ontario brokerage
Ontario brokerage Cornerstone Insurance Brokers has been acquired by Brokerlink for an undisclosed sum.
“Cornerstone Insurance Brokers is a well-established name in Southern Ontario,” said Paul Meyer, Head of Acquisitions for BrokerLink. “Similar to our organization, Cornerstone Insurance Brokers has built their business on a service-oriented and professional culture which has created long-term and high-quality customer relationships. It was easy to see that this acquisition was the right fit for us and we look forward to welcoming their team to BrokerLink.”
Its four locations in n Woodbridge, Markham, Aurora and Barrie – and its 90 employees - will all be integrated as part of the Brokerlink brand. Wendy DaSilva, Chief Executive Officer and Peter DaSilva, President and Chief Operation Officer will be joining BrokerLink to assist during the transition.
Study shows health insurance deductibles have risen sharply
Deductibles for healthcare have risen by 86 per cent according to a study by the University of Michigan. It also found that co-insurance was up 33 per cent during the four-year study period (2009-2013).
The analysis of data from more than 50 million policyholders with health plans from one of four major insurers which pool their data via the Health Care Cost Initiative.
Out of pocket expenses rose 6.5 per cent in the study period while insurance premiums were up 5.1 per cent and overall healthcare spending increased 2.9 per cent.
The study also reveals sharp differences in out-of-pocket costs for people who chose “consumer-directed” health plans offered by their employers ($1,200 average) and for people who bought individual private plans ($1,800 average).
The findings of
the study are reported by JAMA Internal Medicine.
