MICHIGAN: Another One (Mostly) Bites the Dust; 12th CO-OP drops off exchange, *may* go belly-up

Since today's just filled with wonderful news for 418,000 Kentucky residents who are very likely to lose Medicaid coverage, I figured I might as well toss this on the fire as well:

It appears that East Lansing-based Consumers Mutual Insurance of Michigan could wind down operations this year as it is not participating in the state health insurance exchange for 2016.

But officials of Consumers Mutual today are discussing several options that could determine its future status with the state Department of Insurance and Financial Services, said David Eich, marketing and public relations officer with Consumers Mutual.

Consumers Mutual CEO Dennis Litos said: "We are reviewing our situation (financial condition) with DIFS and should conclude on a future direction this week.”

While Eich said he could not disclose the options, he said one is “winding down” the company, which has 28,000 members, including about 6,000 on the exchange.

The good news (such as it is) here is that they're not stating definitively whether they're closing down the Michigan CO-OP completely or not; they might keep it running off of the exchange, where nearly 80% of their enrollees are. However, that's kind of counterproductive thing to say publicly in the middle of open enrollment.

I mean, honestly, if I'm a Michigan resident shopping for a new policy, how likely am I to sign up with an insurance carrier when there's a very good chance that they aren't gonna be around in a few months (or even a few weeks)? Admittedly, the Colorado CO-OP would've been in a similar bind if they'd managed to stay in business, but they seemed to be a lot more positive about their financial position and options as well.

Oh, and yes, the Risk Corridor Massacre is indeed a major part of the problem here in Michigan:

Eich said one of the problems Consumers Mutual is facing is a recent decision by the Centers for Medicare and Medicaid Services to only pay 12.5 cents on the dollar for health plan financial losses on the exchange in 2014. CMS has not decided yet the amount of 2015 payments.

“This affects 2014 and 2015 payments (whatever those will be). We don’t have final numbers,” Eich said.

OK, updating the scoreboard again:

  • 2 CO-OPs operating in 3 states turning a profit (ME/NH, NJ)
  • 4 CO-OPs operating in 5 states treading water (IL, MT/ID, OH, WI)
  • 5 CO-OPs holding on by the skin of their teeth (CT, MD, MA/NH, NM, OR)
  • 1 CO-OP removed from the exchange, possibly to dissolve (MI)
  • 1 CO-OP already dissolved (IA/NE)
  • 10 CO-OPs being dissolved (NV, LA, NY, KY, TN, CO, OR, SC, UT, AZ)