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October 11, 2016 at 12:24 PM
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 HealthCare.gov to run its exchange.
The HealthCare.gov 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.
