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Maine CO-OP to stop selling individual policies for 2016

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The only Consumer Operated and Oriented Plan (CO-OP) carrier that earned a profit in 2014 will stop selling individual and family coverage for 2016 after Dec. 26.

Community Health Options, the Maine-based CO-OP that serves Maine and New Hampshire, will freeze non-group enrollment at the year-end level because of concerns about higher-than-expected claims, according to Maine Insurance Commissioner Eric Cioppa and New Hampshire Insurance Commissioner Roger Sevigny.

The CO-OP will stop taking applications for 2016 non-group coverage outside the Patient Protection and Affordable Care Act (PPACA) public exchange system Dec. 15.

And the company will stop taking applications for 2016 non-group coverage through the PPACA exchange system Dec. 26. Also, the company will continue to sell and renew 2016 group coverage as usual, the company says, which is in accordance with Maine and New Hampshire regulations.

PPACA provided CO-OP startup loan funding, in an effort to increase the level of competition in the commercial health insurance market. The U.S. Department of Health and Human Services (HHS) has prohibited the nonprofit, member-owned CO-OPs from having health insurers as owners or investors. HHS has also prohibits CO-OPs from ever selling their operations to other entities, which, in effect, limits their ability to get loans.

Maine and New Hampshire both have HHS-run public exchange programs using the enrollment systems.

Community Health Options has been beating its growth forecasts. It reported $5.9 million in net income for 2014 on $168 million in revenue.

The company has been covering about 80 percent of the 75,000 people who bought coverage through the Maine exchange for 2015. The company has also been selling coverage for New Hampshire residents.

See also: Low-cost CO-OPs win share

The Centers for Medicare & Medicaid Services (CMS), an arm of HHS, says that the Maine exchange had signed 24,396 people up for 2016 coverage, and that the New Hampshire exchange had signed 13,458 people up for 2016 coverage. Those totals do not include people who will be automatically renewing the exchange plan coverage they have this year. 

The company had higher-than-expected claim costs in the third quarter, and it reported a significant third-quarter loss, Cioppa said.

Company representatives were not immediately available to answer questions, but Mainebiz says the company lost $17 million in the third quarter.

Units of Anthem Inc. (NYSE:ANTM) and Harvard Pilgrim continue to sell individual coverage through the Maine exchange, and Aetna Inc. (NYSE:AET) sells individual coverage in Maine outside the exchange system.

Four carriers continue to sell individual exchange coverage in New Hampshire.

See also: N.Y. CO-OP exiles face confusion, dash for new coverage

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