“The largest private provider of health insurance policies on Kynect, Kentucky's health insurance exchange, is going out of business.
The Louisville-based Kentucky Health Cooperative Inc. announced Friday that it will end current memberships on Dec. 31 and will not add new members because of financial problems. It will not offer health insurance plans on Kynect when open enrollment for 2016 coverage starts on Nov. 1.
The cooperative has about 51,000 members in all 120 Kentucky counties.”
“Glenn Jennings, the interim chief executive officer of Kentucky Health Cooperative, said the decision to shut down was a result of not receiving adequate federal funding "on which the organization had relied."
The co-op, financed by loans under the reform law, lost $50 million last year after selling 75 percent of the private insurance policies purchased on Kynect in its first year. That was far more than the 30,000 customers it was projected to lure.
Many of those members did not previously have health insurance, which led to "a lot of people with pent up medical needs," Jennings said. "When they suddenly had health insurance ... they began using their benefits."
Jennings said the co-op had reversed a trend of significant financial losses, but needed further support under a temporary program meant to keep prices lower by sharing losses between insurance plans and the federal government.
The company's losses had slowed to $4 million by the end of the first half of 2015, he said.
"We were on track to reverse direction and begin operating in the black, and we expected this to come about in 2016," Jennings said.
But the federal government announced last week that it would provide just 12.6 percent of the money requested by insurance providers through the assistance program.
Kentucky had hoped to get $77 million but got $9.7 million, he said.” - Kentucky Health Cooperative Going Out Of Business, 10/09/2015, insurancenewsnet.com
Link to the entire article appears below: