(Bloomberg) — A startup insurance company loaned $145 million by the U.S. government under Obamacare is running out of money and being taken over by state officials in Iowa.
The company, CoOportunity Health, which also serves Nebraska, was placed under Iowa Insurance Commissioner Nick Gerhart’s supervision this week and is no longer accepting new enrollees, according to a statement from his office. While Gerhart’s agency will operate the company for the time being, it’s urging policyholders to seek a new insurer.
CoOportunity Health is a CO-OP, or Consumer Operated and Oriented Plan, one of 23 nonprofit health insurers providing coverage in 26 states. They were created under the Patient Protection and Affordable Care Act (PPACA) to increase competition. PPACA opponents have argued that the CO-OP program may waste government money.
CoOportunity now has 96,350 enrollees, up from 63,000 at the end of March, according to its website. The Centers for Medicare & Medicaid Services (CMS) provided the insurer with $131 million in funding for solvency and $15.4 million for operations, according to a legal filing by Gerhart. CMS told CoOportunity Dec. 16 it couldn’t provide more funds. The insurer lost $46 million from January to October, according to the petition.
“CoOportunity is not insolvent on a statutory basis at this time, but CoOportunity’s lack of additional solvency funding places it in a financially hazardous condition,” the petition said.