Nevada CO-OP to shut down

Drafters of the Patient Protection and Affordable Care Act (PPACA) created the program in an effort to increase the level of competition in the private health insurance market, and to create carriers that were more interested in helping patients than in earning profits. The U.S. Department of Health and Human Services (HHS) issued billions of dollars in PPACA-authorized CO-OP startup loans, and CO-OP managers get tax breaks.

But CO-OP organizers cannot bring in health insurers as investors, and they cannot sell the plans. In 2011, when would-be CO-OP organizers were studying the program, program watchers said those restrictions might doom the organizers’ efforts to raise money from sources other than HHS.

Nevada Health CO-OP did better at attracting enrollees than many other CO-OPs. It ended up with about 16,500 enrollees at the end of 2014, according to the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). The company reached 49 percent of its original 2014 enrollment projection in spite of selling coverage through a state-based exchange that suffered from crippling enrollment system problems in 2014.

Although Nevada CO-OP managers came closer than managers at many other CO-OPs at forecasting 2014 enrollment, the CO-OP still reported a net loss of $15 million for 2014 on $52 million in premium income. The company had $57 million in claims expense and $19 million in administrative expense.

See also: 

Nevada CO-OP seeks enrollee info

CO-OP program: Watchdog agency takes a sniff

Health Co-Ops Face Uncertain Future