Nick Gerhart, the Iowa insurance commissioner, says he is asking a state court for permission to liquidate CoOportunity Health, a struggling Consumer Operated and Oriented Plan (CO-OP).
The commissioner “has determined that the rehabilitation of CoOportunity Health is not possible,” officials said in a statement.
Medical claims currently exceed the amount of cash on hand, and “there is no expectation for additional cash inflow until the second half of 2015,” officials said.
Gerhart put CoOportunity under supervision in late December. In early January, the Iowa Division of Insurance posted guidelines discussing what might happen to enrollees who had to depend on state guaranty fund protection.
Gerhart will file a petition for liquidation this week, and a hearing will occur in late February, officials said.
“An order to liquidate the company should take effect on Feb. 28,” officials said.
The Patient Protection and Affordable Care Act (PPACA) provided startup loan funding for nonprofit, member-owned CO-OPs in an effort to increase the level of competition in the commercial health insurance market. CoOportunity was successful at selling qualified health plan (QHP) coverage through the Iowa and Nebraska PPACA public exchanges, and many of its 96,000 enrollees qualify for PPACA premium tax credits.