‘Another Obamacare co-op, Connecticut’s HealthyCT, is closing its doors, and at least two most could follow suit as the nonprofit insurers decide whether they will be able to remain on firm financial footing.
The nine remaining co-ops of the original 23 co-ops must make payments totaling at least $130 million through Obamacare’s risk adjustment program, which could damage their viability.
The Connecticut Insurance Department announced Tuesday that HealthyCT was placed under state supervision, leaving approximately 40,000 Connecticut residents to find new health insurance during the next open enrollment period.
HealthyCT is the 14th co-op created under Obamacare to fail since the health care law’s exchanges opened in 2013.
The co-ops, or consumer operated and oriented plans, were created to inject competition and choice in areas where little existed. The Centers for Medicare and Medicaid Services awarded the 23 co-ops $2.4 billion in startup and solvency loans to help the new nonprofit insurance companies get off the ground.
However, more than half of the co-ops have failed to succeed in the health insurance market, despite the $1.5 billion in loans the 14 collapsed co-ops collectively received.
HealthyCT alone received nearly $128 million in loans, which included an infusion of $48.4 million in solvency loans awarded in September 2014.
Katharine Wade, state insurance commissioner, said HealthyCT’s “hazardous financial condition” led her to close the co-op’s doors. The nonprofit insurer’s financial issues were compounded after the Centers for Medicare and Medicaid Services announced last week the payments insurers must make under Obamacare’s risk adjustment program.
The Department of Health and Human Services asked HealthyCT to pay $13.4 million into the risk adjustment program, which redistributes money from insurers with healthy customers to insurers with sicker, more costly consumers.
“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,” Wade said in a statement Tuesday. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain.”’- Obamacare’s 14th Co-Op Is Closing Its Doors, and at Least 2 More Could Close Soon, dailysignal.com, 07/06/2016
Link to the entire article appears below: