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Maine CO-OP can sell 2017 coverage

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Maine’s CO-OP health carrier has a shot at surviving in 2017.

The federal Centers for Medicare & Medicaid Services (CMS) and state insurance regulators have given Community Health Options, a Consumer Operated and Oriented Plan program carrier, permission to sell health coverage in Maine for the coming year.

The Lewiston, Maine-based carrier can sell both individual and small-group coverage, both on and off the state’s Affordable Care Act public health insurance exchange, the carrier announced today.

In July, Community Health Options was covering 65,188 people in Maine and 11,438 people in New Hampshire.

Maine uses to run its exchange. 

The open enrollment period for coverage that takes effect in 2017 is set to start Nov. 1 and end Jan. 31.

Like most of the other surviving CO-OPs, Community Health Options has been facing financial problems that have raised questions about its ability to stay in business.

ACA drafters provided startup loan funding for CO-OP carriers in an effort to increase the level of competition in the commercial health insurance market, by creating a new breed of nonprofit, member-owned carriers.

CMS, an arm of the U.S. Department of Health and Human Services, has provided the Maine CO-OP with a total of about $197 million in startup loan funding and additional financial support, according to a recent House Energy and Commerce Committee report.

Republicans in Congress have reduced CO-OP program funding several times.

Soon after President Obama signed the two bills that create the ACA into law, in 2010, CMS responded to the concerns of consumer groups and traditional insurers by putting sharp limits on CO-OPs’ operations. CMS ruled, for example, that the CO-OPs had to use their own cash for marketing; that no established health insurer could invest in a CO-OP; and that the member owners of a CO-OP could never sell it. CMS now says it could loosen the ban on CO-OP sales for a CO-OP facing a financial crisis, but that restriction has kept CO-OPs’ from using their assets as loan collateral.

The ACA exchange system got off to a rocky start, and an ACA program that was supposed to help CO-OPs and other carriers get through ACA turbulence, the ACA risk corridors program, performed poorly.

Because of a combination of those challenges, stiff competition and the CO-OPs’ decisions, a majority of the CO-OPs have shut down. Earlier this year, all but one of the surviving CO-OPs was getting some form of extra financial supervision.

In Maine, Community Health Options got off to a fast start. It was the only CO-OP that reported a profiect for 2014. It tried to build on that success by expanding into New Hampshire.

In late 2015, the carrier discovered it had underpriced coverage for 2015 and locked in unrealistically low premiums for 2015. In October 2015, it tried to get managers to block sales of its underpriced 2016 coverage, but managers did not suspend sales of the underpriced 2016 Community Health Options plans until Dec. 27, 2015.

Community Health Options announced a month ago that it would try to improve its finances by withdrawing from the New Hampshire exchange in 2017 and focusing on Maine.

Related: Maine CO-OP to pull out of New Hampshire

Kevin Lewis, president of Community Health Options, said in a statement that getting CMS certification shows the carrier meets all state, federal and network standards.

“We are pleased with the expressed confidence and stamp of approval of this recertification for open enrollment,” Lewis said in a statement.

Officials at the Maine Bureau of Insurance said Community Health Options’ recent financial results have been consistent with the carrier’s monthly operating plan.

“The Affordable Care Act environment within which [Community Health Options] operates continues to present may difficult challenges,” Maine officials said. “While the future cannot be predicted with full accuracy, CHO’s ability to stabilize its operations in 2016 and achieve plan results up to this point is encouraging and merits its re-entry into the Maine individual health insurance market for 2017 in a measured way. The bureau will continue its close monitoring of CHO in 2017.”


Regulators: Maine CO-OP lost $74 million in 2015

Maine CO-OP to stop selling individual policies for 2016

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