CoOportunity Health — a troubled CO-OP health insurer that has about 96,000 enrollees in Iowa and Nebraska — is still paying claims, but its operations may change significantly.
Regulators have said there’s a possibility that the CO-OP could lose its ability to provide coverage that offers enrollees access to Patient Protection and Affordable Care Act (PPACA) premium subsidy tax credits.
A state court in Iowa has given Nick Gerhart, the Iowa insurance commissioner, authority to put CoOportunity in rehabilitation. CoOportunity has said that claims proved to be higher than expected, and that it now believes that collecting cash from the risk-management programs created by PPACA may take longer than it had hoped.
The drafters of PPACA set up the Consumer Operated and Oriented Plan (CO-OP) program in an effort to increase the level of competition in the health insurance market. A CO-OP must be a nonprofit entity that’s owned by its enrollees. A CO-OP can get a limited amount of support from the federal government. A CO-OP cannot get support from an existing for-profit or nonprofit health insurers, and the enrollee owners cannot sell a CO-OP.
CoOportunity was a major player in the Iowa and Nebraska individual and Small Business Health Options Program (SHOP) exchange qualified health plan (QHP) markets.
CoOportunity has stopped selling new health coverage, and it has stopped letting workers at employers with SHOP plans enroll in the plans, officials say in a notice. The CO-OP has also suspended making agent and broker commission payments.
“Pharmacy prescriptions will be filled for 31 day periods going forward,” officials say. “Claim payments to providers are being processed as usual, but payments will not be made as promptly as they have been previously.”
In a separate notice aimed at producers, officials say individuals should continue to pay premiums for any individual CoOportunity coverage they have. Enrollees can change plans until the end of the open enrollment period, on Feb. 15, but changing plans could require a consumer to start a new deductible period with the new carrier.
Employers can move to another carrier “off renewal” without providing 30 days’ notice, but CoOportunity will not provide deductible credit reports for groups that move off-renewal, officials say. “If the new carrier honors deductible credit, employees will need to provide [explanations of benefits] to determine the applicable deductible credit.”
“If CoOportunity Health cannot put forward a plan to remain viable, the rehabilitator will have to move for an order to liquidate the company,” officials say. “If that occurs, individual plans will remain in effect, but subject to the state guaranty fund limitation of coverage ($500,000 per individual). If the plan is no longer a qualified health plan, the plan may not be eligible for tax credit subsidies.”
If CoOportunity loses access to the PPACA tax credit program, the enrollees would have to find other QHP coverage to keep access to the tax credits, officials say.