The chance for a consumer operated and oriented plan (CO-OP) to compete in the Vermont health insurance exchange was shot down Wednesday by state regulators.
The Vermont Department of Financial Regulation denied a license to the Vermont Health CO-OP to sell health insurance in the state, primarily because of financial solvency and corporate governance issues, according to the department's decision.
"When you have clear concern that what you would be doing is creating an insurer with a high risk of insolvency within the first three years of operation that's not a company we want to move into the Vermont market," Commissioner Susan Donegan told VT Digger.
She said the CO-OP's proposed plan included premiums that would have been 15 percent higher than competing policies from long-established insurers Blue Cross Blue Shield of Vermont and MVP Health Care. "CO-OP plans would consistently offer consumers fewer benefits than competitors for a similar price," Donegon wrote.
In addition, Donegon cited the lack of insurance industry experience among the CO-OP's board members and management-level employees, according to the Barre Montpelier Times Argus. "Running an insurance company is not like running any other kind of company … if you don't have board members and management that are keeping checks on each other, then it exacerbates the solvency risk."
In response to the department's decision, Christine Oliver, CEO of the CO-OP, said it will consider all options, including reapplying for a license or filing a lawsuit over the denial, in the next few days, she told the Burlington Free Press.