CoOportunity Health, the health insurance cooperative based in Des Moines, is now under the control of the Iowa Division of Insurance because the company’s financial future is in jeopardy. CoOportunity Health is one of 23 “Consumer Operated and Oriented Plans” to receive federal low-interest loans. http://www.cms.gov/CCIIO/Resources/Grants/new-loan-program.html. Insurance plans were offered to Nebraska and Iowa employer groups and individuals beginning January 1, 2014.
The premiums charged by CoOp were very competitive, particularly in Nebraska. At a time when there seems to be no end to escalating health insurance premiums, the benefits and rates offered by CoOp were a refreshing change in direction. The initial projections for CoOp were that 12,000 to 15,000 policies would be sold in the 2 state region. The actual figure was in excess of 100,000. The premiums were not enough to cover the claims that were being paid; resulting in a substantial loss. Insurance companies are required to maintain reserves to assure that future claims will be paid. Where do the dollars come from to fund the reserves if there is a loss in operations? The consequence is that the company is now operating under a “Rehabilitation Order” with the Iowa Division of Insurance. It appears very unlikely that the company will be able to continue.
*http://www.iid.state.ia.us/node/9885312
*http://www.doi.nebraska.gov/notices/notc2014/notice10.pdf
All CoOportunity Health policyholders are strongly encouraged to change their coverage to a different insurance company. Employer group plans can change at any time. There is no connection to the “Open Enrollment” period for group plans.
During the Open Enrollment, individual policyholders can select any health insurance plan, either through the Health Insurance Marketplace or directly from an insurance company. This must be done by February 15th, for an effective date of March 1st.
What happens to those individuals who decide to “ride it out” with CoOportunity? There are more questions than answers. It is not clear if a Special Enrollment Period will be available if CoOportunity ceases operation. This has never happened before under the Affordable Care Act, so it will be a work-in-process. Here is an excerpt from “Guidance for Agents & Brokers on Current CoOportunity Health Business” dated 1/7/15 from the Nebraska Department of Insurance.
“Should CoOportunity Health move into a liquidation status, it is important to understand the following:
• There is a $500,000 per member limit on medical and pharmacy claims from the State of Iowa and State of Nebraska guaranty associations when an insurer goes out of business; this $500,000 limit does not include member cost share and is based on the contracted rate CoOportunity Health reimburses providers – not what the provider charges. Any medical and pharmacy claims in excess of $500,000 would be the member’s responsibility.
• Any Advance Premium Tax Credits (APTCs) received for on-Marketplace plans may no longer be available. In that case, the member would be responsible for the entire premium.
Should CoOportunity Health move into liquidation status, it is important to understand that if an individual chooses to maintain CoOportunity Health coverage rather than move to another carrier by February 15, the limitations outlined above apply and policyholders may not be able to choose another carrier until the Open Enrollment Period in the fall of 2015.”
by Chris McPike, Vice President
402-488-5100
www.comproins.com