State insurance co-op lost $31 million last year

State insurance co-op lost $31 million last year

State insurance co-op lost $31 million last year The remaining health insurance cooperatives established under the Affordable Care Act are still struggling.

Maine-based Community Health Options, the only insurance co-op in the country to make money in 2014, this week posted a loss of $31 million in 2015. The group also said it is setting aside $43 million in reserves to cover potential losses this year.

The degree of losses for the Community Health Options was made apparent late in 2015 and led the group to stop enrolling new customers in its individual plans in December.

Chief Executive Officer Kevin Lewis has said the co-op will likely raise its premiums this year, though he declined to speculate on the size of the increase. Instead, he told the Portland Press Herald that th group will submit its rate proposal to state insurance regulators in mid-May after it has finished developing the increase.

“We have a clear plan for 2016,” he said. “It’s safe to say there will be increases.”

Community Health Options stood out last year when it raised rates just 0.5%, while competitors and other health co-ops increased prices sometimes by double digits.

The group has been a popular choice among Maine consumers, signing up about 40,000 policyholders I its first year. Currently it has 84,000 customers in the state.

However, Lewis says enrollees accessed “significantly more” healthcare last year than they did in 2014, driving up costs and increasing losses. Combined with the skyrocketing costs of pharmaceuticals, the group suffered.

“That caught us by surprise,” Lewis said of the $250.3 million the group paid in health claims last year. It was a dramatic increase from the $117 million consumers claimed in 2014.

But Community Health Options has taken steps to address losses. In addition to increasing premiums, Lewis said the group cut $11 million in administration costs at the end of the year and is in contact with customers to help them make sure health issues are addressed appropriately.

Emily Brostek, executive director of Consumers for Affordable Healthcare in Augusta, told the Herald that no one expected a trouble-free debut for the health co-op.

“Health insurance is a competitive market and it’s hard to get a company going,” Brostek said.

However, she expressed confidence d that Community Health Options will be able to work with state regulators and return to profitability in the future.

Community Health Options is currently under “enhanced oversight” by the state.