South Carolina: 9th CO-OP to fold, 6th victim of Risk Corridor Massacre
(sigh) I thought the dust had settled on the Risk Corridor Massacre, but apparently not:
~67,000 need to find new 2016 coverage, SC DOI tells me. CCHP is the ninth co-op to announce closure so far.
— Rachel S. Karas (@rachelkaras) October 22, 2015
Consumers’ Choice Health Insurance Company Agrees to Wind Down Its Operations
COLUMBIA, SC – Consumers’ Choice Health Insurance Company (Consumers’ Choice) has agreed to a voluntary run-off and will not offer health insurance coverage in 2016.
“This was a difficult decision for the insurer and this agency, but this is what is in the best interests of South Carolina consumers and health care providers,” said Ray Farmer, Director of the South Carolina Department of Insurance.
“The recent announcement of a risk corridor reimbursement of just 12.6% cast doubt on the collectability of tens of millions of dollars through the federal risk corridor program and led to an unavoidable outcome,” said Jerry Burgess, President and CEO of Consumers’ Choice.
The decision to run off its existing book of business means that Consumers’ Choice will not offer plans for 2016 and any policies that became effective in 2015 will terminate at the end of this year. As a result, approximately 67,000 individuals and small businesses will have to shop for new coverage for 2016 as they will not be able to keep their current coverage.
Ultimately, the decision was made to wind down operations because the company’s financial condition could worsen significantly. This decision comes now because it is much easier for consumers to transition to a new plan effective January 1, 2016 than it would be to move in the middle of a benefit year.
“The South Carolina Department of Insurance will do everything it can to assist South Carolinians through this process,” Farmer said.
“In the coming days, weeks and months, Consumers’ Choice will continue to focus all of its efforts on taking care of its members and also working with the South Carolina Department of Insurance as well as the Centers for Medicare & Medicaid Services to help ensure a smooth transition,” added Tim Ervolina, Chairman of the Board of Directors for Consumers’ Choice.
Consumers’ Choice is required to submit a run-off plan to the Department “This should be an orderly run-off of the company’s business. Our expectation is that the company will honor its existing commitments to policyholders and health care providers as a part of winding down its operations. The Department has monitored the financial condition of this insurer very closely since licensure and will continue to do so until this process is complete,” Farmer said.
The Department has compiled an initial list of Frequently Asked Questions for impacted consumers and providers, which are attached to this release and available on the Department’s ACA page.