Maine/New Hampshire: Community Health Options CO-OP suspends new 2016 enrollments early
2018 MIDTERM ELECTION
Time: D H M S
(sigh) OK, this one is not related to the Risk Corridor Massacre, since Community Health Options was actually profitable in 2014 and therefore never qualified for any RC payments anyway. Also, unlike the dozen ACA-created co-ops which are in the process of winding down operations by the end of the year, CHO is not going out of business, and in fact is remaining fully operational for 2016.
Having said that, this development is still a serious bummer given the carnage wreaked across the co-op landscape earlier this fall:
Maine's Community Health Options said Dec. 9 that it will cut short its sales of individual policies for 2016, in a sign that it is the latest Affordable Care Act-funded consumer operated and oriented plan to encounter financial difficulties.
The taxpayer-backed company will end its sales of individual coverage more than a month before the 2016 enrollment period officially ends on Jan. 31, 2016. Buyers will not be able to purchase individual insurance directly from Community Health Options after Dec. 15 and similarly will not be able to purchase those plans through HealthCare.gov after Dec. 26.
Again, to reiterate: Unlike the dozen failed co-ops, CHO's current enrollees have nothing to fear; they should be able to renew their policies for at least another year. In addition, new 2016 enrollees can continue to sign up directly right through the 12/15 deadline for January coverage, and through 12/26 via HealthCare.Gov, which is a little odd to me (why not cut things off on the same date for both? Weird.) On the other hand, given this news, my guess is that it's gonna scare off a lot of potential new enrollees going forward anyway.
In any event, I expect roughly 80% of all #OE3 plan selections to be completed by 12/26 anyway, so assuming people aren't scared off by the announcement, they should end up only "losing" about 20% of the enrollees they'd otherwise be signing up for 2016.
So, what happened? Unlike the dozen others which fell victim, partly or wholly to the Risk Corridor Massacre, the CHO co-op is simply having a lousy Year Two after a successful Year One, and is being prudent:
The insurer blamed higher-than-expected claims costs for its need to curtail enrollment, saying in a statement that it has seen significant enrollment growth during the last two years.
Maine Bureau of Insurance Superintendent Eric Cioppa told SNL that regulators stepped in after Community Health Options saw a jump in claims during the second half of 2015. The worsening experience raised concerns that the co-op's individual plans for 2016 were not priced high enough to account for the additional new risk that it was taking on.
...Community Health Options reported a $17.3 million year-to-date net loss through Sept. 30, compared with the $1.9 million year-to-date net income that it recorded through June 30.
,,,The spike in claims costs did not stem from any single issue, Cioppa said, attributing it more to an uptick in the sheer number of claims filed. Community Health Options is updating its business plan now, with the expectation that it will refile its rates and participate on the exchange during the enrollment period for 2017 coverage.
In other words, they're doing this to avoid the fate which befell a dozen of their colleagues, which is wise of them. If the other co-ops had taken this step a year ago, a few of them may have ended up surviving as well, but they were (rightly) under the impression that they'd be reimbursed for their losses for the first 3 years under the RC program, so having that yanked away after it was too late was devastating (remember, the "CRomnibus" bill which kneecapped the RC program wasn't even signed until December 12 last year, and the co-ops didn't really know the full impact of it until late this summer).
So, this is more of a setback for the Maine/NH co-op, but still disappointing.