IMPORTANT UPDATE: Oregon: (sigh) Scratch yet another Co-Op off the list...
2018 MIDTERM ELECTION
Time: D H M S
Oy vey iz mir. Last fall, half of the two dozen Co-Ops created by the ACA were wiped out, falling like dominos over about a two month period, for a variety of reasons including the Risk Corridor Massacre. The other half managed to survive The Purge, many of them just barely doing so.
This year, it looks very much like the Risk Adjustment debacle has decided to try and finish off the job.
Just 3 days ago, the Connecticut Co-Op, HealthyCT, announced that they were folding up shop.
Just yesterday it was announced that the state of Illinois is taking unusual, last-ditch measures to attempt to salvage their co-op, Land of Lincoln Health.
And just moments ago, this was announced:
.@OregonDCBS shutting down Oregon's Health CO-OP, which has 20,600 policyholders, due to sudden financial "deterioration." More to come.
— Tara Bannow (@TaraBannow) July 8, 2016
Note: The Oregon Health Co-Op should not be confused with Oregon's other Co-Op, Health Republic, which was among the first batch of them to shut down last fall.
IMPORTANT UPDATE: Yikes!! It turns out this situation is even worse than I thought. In most cases, when one of the co-ops has been shut down, they've done so in a way which at least keeps their enrollees fully covered through the end of the current year (December 31st). However, it appears that the Oregon Health Co-Op situation is so ugly that they're being forced to shut down at the end of July. That's right: All 20K current enrollees (around 13,000 in individual policies, 7,000 in small group plans) only have three weeks to use the Special Enrollment Period in order to switch over to a different type of coverage. From Tara Bannow, the same reporter who posted the tweet above:
Oregon’s Health CO-OP will shut down at the end of this month after the company dramatically overestimated the amount of financial support it would receive from a federal program.
...The company’s roughly 20,600 policyholders statewide will need to enroll in new policies by July 31 to secure new coverage by Aug. 1.
Apparently the Co-Op thought that they were going to receive about $5 million from the ACA's Risk Adjustment program...instead, they owe $900K:
The Oregon Department of Consumer and Business Services, which regulates insurance, is taking action to shutter the carrier after the Centers for Medicare and Medicaid Services announced last week the CO-OP owes about $900,000 to the federal risk adjustment program, which pays health insurers that take on a disproportionate number of sick enrollees under the Affordable Care Act. The CO-OP expected to receive about $5 million from the program.
It's worth noting that it sounds like they would have been on very thin ice even if they had been correct in their estimate. That's just a $5.9 million difference, versus an $18.4 million loss in 2015.
In any event, those 20K Oregonians now have to scramble quickly to avoid a coverage gap:
Meanwhile, by my reckoning, here's the status of every one of the original 23 ACA-created Co-Ops (there's 27 listed because several were/are operating in more than one state):
It looks like there's 11 surviving, but note that "Mountain Health" (Idaho) and "Montana Health" are actually the same; Minuteman Health operates in both Massachusetts and New Hampshire; and Community Health Options operates in both Maine and New Hampshire. so that brings it down to 8.