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Colorado PPACA CO-OP strategy unclear

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Managers of Colorado Health Insurance Cooperative (the Colorado HealthOP), a nonprofit, member-owned health insurer, announced Monday that they have sued to keep state insurance regulators from shutting the company down.

Alicia Wallace of the Denver Post later reported, however, that the managers went into a closed hearing and came out saying they will work with the Colorado Division of Insurance to help shut the Colorado HealthOP down.

Wallace quotes Julia Hutchins, the chief executive officer of the Colorado HealthOP, as saying that there will be no further hearings on the matter.

Representatives from the Colorado HealthOP were not immediately available to comment on the Denver Post account.

Officials at the Colorado Division of Insurance (DOI) said in a statement that they look forward to working with the Colorado HealthOP to wind down its operations.

“The DOI will be working through all of the details in the coming days and weeks,” officials said.

The Rocky Mountain Farmers Union Educational and Charitable Foundation used a $69 million loan from  the Patient Protection and Affordable Care Act (PPACA) Consumer Operated and Oriented Plan (CO-OP) program to start the Colorado HealthOP.

See also: Colorado regulators move to decertify state’s CO-OP

The plan has about 83,000 enrollees, and a 40 percent share in Colorado’s public health insurance exchange market, but it was counting on cash from the PPACA risk corridors program to cope with startup losses.

The risk corridors program was supposed to give insurers the confidence to participate in the PPACA public exchange program, and to keep exchange premiums low, by using cash from exchange plan issuers that did well in 2014, 2015 and 2016 to help issuers that did poorly. Officials at an arm of the U.S. Department of Health and Human Services (HHS) recently said the program appears to be on track to collect only enough cash from thriving issuers to pay about 13 percent of the risk corridors program obligations to struggling insurers.

See also: PPACA risk corridors gap rocks more carriers

Colorado insurance regulators announced Friday that, because of the difficulty the Colorado HealthOP is likely to have with collecting the risk corridors money, the division was moving to take away the certification that the company would need to sell qualified health plan (QHP) coverage through the Colorado exchange in 2016.

The Colorado HealthOP managers said Monday that they would be seeking a temporary restraining order and preliminary injunction to keep regulators from removing the company’s QHPs from the exchange plan menu. In a statement included with that announcement, Hutchins said she believed Marguerite Salazar, the Colorado insurance commissioner, had “the discretion to work with us to overcome the injustice that was dealt by the federal government.”


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