2018 MIDTERM ELECTION

Time: D H M S

Tennessee: Another CO-OP bites the dust.

(sigh) I noted, at the end of my "Transitional Plan" rant a few days ago, that in addition to the Kentucky Health CO-OP going belly up, there would likely be additional casualties announced over the next couple of weeks:

By contrast, the damage from the Risk Corridor program being crippled is specific, quantifiable and obvious: Company X lost $22 million in 2014; they were supposed to receive $20 million (or whatever) back in risk corridor reimbursements; the CMS dept. only has $2.5 million to pay them back with, period, so they have to eat the remaining $17.5 million loss until next year or the year after...if they're able to stick it out that long.

The Kentucky Health CO-OP couldn't stick it out that long...and it's possible that similar press releases may be forthcoming for a few other CO-OPs (and/or other smaller insurers) over the next week or so.

Sure enough, the Tennessee CO-OP, Community Health Alliance, has pulled the plug as well:

NASHVILLE – Community Health Alliance (CHA) has voluntarily entered state-approved runoff and will not offer insurance coverage in 2016.

The runoff decision came after careful analysis of the company’s current and future financial condition and lengthy discussions involving the Centers for Medicare & Medicaid Services, the Tennessee Department of Commerce & Insurance (TDCI) and CHA. Created as a Consumer Operated and Oriented Plan (CO-OP) under the Affordable Care Act, CHA has approximately 27,000 enrollees.

Runoff is when a business winds down its existing business and pays all related policy claims while ceasing to take on new customers. CHA policyholders will keep their insurance coverage through Dec. 31, 2015 so long as they continue to pay premiums. To continue insurance coverage in 2016, consumers must re-enroll in a new healthcare plan during the next Open Enrollment period beginning Nov. 1. Consumers should enroll by Dec. 15, 2015 for coverage effective Jan. 1, 2016.

“This was not a decision that the Department took lightly, but it was the right decision,” TDCI Commissioner Julie Mix McPeak said. “With thousands of Tennesseans’ coverage hanging in the balance, CHA’s financial success could not be guaranteed. Ultimately, the risk of CHA's potential failure in 2016 was too great and would have caused substantial detrimental effects on the market as a whole if it were to collapse.”

CHA’s enrollment of new customers on the Federally Facilitated Marketplace (FFM) was frozen in January. This summer, CHA received TDCI’s approval for new rates and had planned to offer coverage on the FFM in 2016.

Unlike the Kentucky CO-OP, where the blame can be pinned completely on GOP sabotage to the risk corridor program last December, the Tennessee CO-OP appears to have had other problems as well:

However, recent guidance about a federal program designed to assist health insurance carriers as well as disclosures about the company raised concerns about its future.

The "good" news here is that CHA's 27,000 enrollees do have several other options:

Tennessee still has four carriers on the FFM offering insurance coverage for 2016 and allowing Tennessee consumers to select a range of insurance plans, depending on their location.