UPDATE: WI, ME, NH, OH, MT, ID & IL: Some GOOD CO-OP news for a change...
I admit that given the carnage of the past couple of weeks, I'm almost afraid to post this entry...but I had to write something positive about the CO-OP situation.
With the ACA-created CO-OPs seemingly dropping like flies due to the #RiskCorridorMassacre, I thought this would be a good time to flip things around and look at which CO-OPs are doing well (or at least not badly).
This isn't much, but it'll do for now:
Wisconsin's insurance department says it has no intention of shutting down its #ACA co-op, which appears it will remain solvent next year.
— Bob Herman (@MHbherman) October 22, 2015
@charles_gaba and at this point, other than Maine, it's difficult to expect many others will last beyond risk corridors.
— Bob Herman (@MHbherman) October 22, 2015
The Maine CO-OP (which also expanded into New Hampshire this year) is the only one (out of the 14 remaining CO-OPs, out of 23 originally created) to make a profit in 2014, so I knew they'd be fine at this point as well.
Interestingly, the Wisconsin CO-OP lost $36.5 million in 2014, yet is surviving...while the South Carolina CO-OP, which only lost $3.8 million last year, folded up shop today. I'm not sure what to make of that...presumably Wisconsin turned things around bigtime the first part of 2015 while South Carolina is having a terrible Year Two??
Other than these two, the only "positive" status news I have is for Ohio and Montana/Idaho:
OHIO: It's actually a fairly negative story, but is positive in the sense that, according to the CEO, they're doing well enough at the moment to squeak by. Of course, that doesn't mean that they won't have the plug pulled next year at this time, but if they manage to improve things they might make the cut:
The federal government is increasing its scrutiny of a cooperative in Westerville that was set up to help ensure a lower-cost option for Ohioans who shop the federally run health-insurance marketplace.
The health-insurance cooperative, which does business as InHealth Mutual, is now under “enhanced oversight,” having reported a net loss of $9.1 million through the first six months of this year.
It has capital on hand of $27.1 million — a decline from previous reporting periods, according to a financial statement obtained on Monday by The Dispatch.
InHealth, also known as Coordinated Health Mutual, is one of about two dozen “consumer operated and oriented plans,” or co-ops, nationwide that are receiving a combined $2.4 billion in loans from the federal government.
InHealth’s share of that money is about $129 million.
InHealth’s president and CEO, Jesse Thomas, said that his cooperative plans to soldier on.
A key measure of the cooperative’s financial health — its “risk-based capital requirement” — remains higher than required by the Ohio Department of Insurance and the federal government, but is still lower than what officials want to see, Thomas said.
InHealth will try to slow its use of cash reserves, in part by working to get hospitals, doctors and other providers in its health network to agree to lower reimbursement rates, Thomas said.
A similar article can be found about the Montana (and Idaho) CO-OP (and, surprisingly, calls out Republicans specifically for the CRomnibus debacle):
Health insurers selling individual policies on Montana’s “marketplace” will be shorted millions of dollars in federal payments this year, thanks to an Obama administration decision unveiled this month.
But two of the three insurance firms say it shouldn’t hurt their financial position too much.
“This hurts us and it hurts a lot of (health) co-ops, but because of the way we’ve managed our costs, we’re still in good financial shape,” said Jerry Dworak, CEO of the Montana Health Co-op. “We think this is just a blip going forward.”
The Co-op, which insures 23,000 people in Montana and another 20,000 people in Idaho, had expected about $6 million this year in federal “risk-corridor” payments to help offset losses for 2014, its first year of operation.
...The payments help companies cover losses that exceed the premiums they charged for marketplace policies sold in 2014 – the first year such policies became available, as part of the federal health-care overhaul.
It’s also uncertain whether these payments will be made for 2015 and 2016.
Dworak said the loss of 88% of the 2014 payments may sink some of the new, state-based nonprofit health insurance co-ops created and financed by the ACA.
The Montana co-op, which lost $3 million last year, is not in danger of folding, he said, because it has maintained strong reserves and did not expand too quickly.
“We kept our costs down,” Dworak said. “We’ve been very conservative. That’s kind of saved the day for us, for now.”
The cut in payments stems from a budget deal worked out in Congress, in which Republicans insisted the program be “revenue neutral,” which they knew would mean less money for insurers, he added.
Insurers will be watching and waiting to see what happens to the money for 2015 and 2016, he said.
I do need to stress that just because the CEOs of both CO-OPs claim they're in the clear doesn't mean they are. Just last week, the Colorado CO-OP, which had been extremely positive and certain that they had arranged for alternate financing literally hours earlier, had the plug pulled by the CO Dept. of Insurance anyway. In addition, until today I thought that South Carolina's CO-OP was also in the clear since they came away from 2014 with relatively minor losses...but they shut down today anyway.
So, it's still entirely possible that both the Ohio and Montana/Idaho CO-OPs will have ugly news soon as well...but if not, that's 4 CO-OPs operating in 6 states which should survive another season.
UPDATE: A similar "in trouble but surviving Year Three" situation was also reported today in Illinois:
The recent demise of several Obamacare-spawned health insurers across the country has raised concerns about the future of Land of Lincoln Health as it enters its third year of open enrollment Nov. 1.
Jason Montrie, president of the Chicago-based startup, emphatically offered assurances in an interview this week that the company is not in danger of shutting down. But the plan includes some short-term pain.
The company will limit how many policies it writes for next year to ease some financial pressures. Montrie acknowledged that capping enrollment is a tough pill to swallow after the company experienced explosive growth this year, as membership rose from less than 4,000 people in 2014 to 54,000 this year.
OK, so by my count, that's at least one CO-OP doing well and 4 more which are at least doing well enough to tough it out for the 2016 season. I guess that's something...