Concerns about the newly released Affordable Care Act risk management program results for 2015 have contributed to the sudden death of a nonprofit, member-owned health insurer in Oregon.
Officials at the Oregon Department of Consumer and Business Services say they have filed for state court approval to put Oregon’s Health CO-OP in receivership, and to have its operations end July 31.
Oregon’s Health CO-OP ended March with 11,800 individual coverage holders and about 8,800 in large and small group plans. All of the current enrollees will need new coverage Aug. 1, officials say.
Oregon is starting a special enrollment period process for all affected enrollees today. The affected consumers have until July 31 to apply to have replacement coverage take effect Aug. 1, officials say.
“They can enroll through HealthCare.gov to access financial help or enroll directly through an insurance company or broker,” officials say. “Consumers must pay the premium to their new insurer for the plans to take effect.”
Insurance regulators in Connecticut announced last week that they were putting that state’s CO-OP, HealthyCT, under supervision and having it shut down at the end of the year.
Oregon began January 2014 with two carriers created using ACA Consumer Operated and Oriented Program loan funding.
Oregon carriers’ confidence in the ACA risk-management programs was strong, and competition in the state’s individual health market was fierce. Widespread carrier losses in 2014 and 2015 led state regulators to take the unusual step of requiring five insurers to charge more for individual coverage in 2016 than they had originally suggested.
ACA drafters created three big risk management programs to help health insurers cope with new ACA product design rules and underwriting restrictions: a temporary reinsurance program, which has been using cash from all carriers to help issuers of ACA-compliant individual coverage with catastrophic claims; a temporary risk corridors program, which is supposed to using cash from thriving exchange plan issuers to help struggling issuers; and a risk-adjustment program
The ACA reinsurance program paid CO-OPs more than they were expecting, but the Centers for Medicare and Medicaid Services (CMS) stunned the CO-OPs, and other carriers, in October 2015, by warning them that the risk corridors program would pay only about 13 percent on the dollar.