A state court in Louisiana has issued an order giving Louisiana Insurance Commissioner, Jim Donelon, authority to put Louisiana Health Cooperative in rehabilitation.
The nonprofit, member-owned insurer, which was organized with a $56 million loan from the Consumer Operated and Oriented Plan (CO-OP) program, announced plans in July to wind down operations by the end of 2015.
See also: Surviving PPACA CO-OPs may have 475,000 enrollees
In a petition seeking court permission to take over the plan, Donelon said he believes he needs to take control over the health maintenance organization (HMO) because it no longer meets statutory minimum surplus requirements and because he believes letting the plan wind its affairs down might not be in the best interests of policyholders.
Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the CO-OP program in an effort to increase the level of competition in the U.S. health insurance market.
The Louisiana CO-OP ended up attracting only about 15,000 enrollees, or about half of what organizers had originally hoped.