Gaps in state and federal insurance rules could create surprising traps for consumers affected by health insurer failures.
Regulators at the Iowa Insurance Division talk about some of the traps they have discovered in a notice aimed at consumers who have major medical coverage from CoOportunity Health.
CoOportunity was one of the new nonprofit, member-owned Consumer Operated and Oriented Plan (CO-OP) insurers created by the Patient Protection and Affordable Care Act (PPACA). The company was successful at attracting business through the PPACA exchange system, and it ended up with about 100,000 enrollees in Iowa and Nebraska.
CoOportunity faced a shortage of cash because of a combination of high claims and delays in the payments that are supposed to be coming from PPACA reinsurance, risk-adjustment and risk corridors risk-management programs. Iowa filed a petition for liquidation with a state court in Iowa in January.
Iowa regulators expect to have the state court make the liquidation of CoOportunity effective Feb. 28.
The ordinary PPACA open enrollment period ends Sunday. To buy 2015 individual major medical coverage after that date, a consumer will have to qualify for a special enrollment period (SEP). Once CoOportunity is liquidated, enrollees who have not already found new coverage will get a 60-day SEP they can use to buy new coverage, officials say.