Evergreen Health halts individual policies for 2017

Evergreen Health webpage
Maryland CO-OP Evergreen Health will stop selling individual policies as it undergoes a transformation to a for-profit company.

Evergreen Health, a Maryland-based consumer-operated and -oriented plan that bucked the trend of failing CO-OPs, will now stop selling individual policies as it undergoes a transformation to a for-profit company.

The insurer will neither offer any new individual policies during the current open enrollment period nor renew any individual policies, Maryland’s insurance commissioner announced Thursday. Customers who bought Evergreen plans on the state’s public exchange will be renewed into the most similar plans available in their area, while those who bought individual policies off the exchange must find new policies.

“After many months of working closely with Evergreen management, leadership at the Centers for Medicare & Medicaid Services and outside investors to find a workable solution, we have run out of time to meet the deadline for a Jan. 1 effective date,” Commissioner Al Redmer Jr. said in the announcement.

Peter Beilenson

Evergreen’s decision to allow private equity investors to take over the CO-OP comes amid financial struggles that CEO Peter Beilenson has said are mainly due to the high amount it was required to pay through the Affordable Care Act’s risk adjustment program. Beilenson has been an outspoken critic of risk adjustment, arguing the formula used to calculate payments and collections unfairly penalizes smaller insurers. In June, Evergreen filed a lawsuit seeking to stop CMS from collecting risk adjustment payments until it adjusts the program.

Beyond its risk adjustment woes, though, Evergreen has stood out as one of the more innovative CO-OPs among a class of Affordable Care Act-created insurers that have largely floundered. In a previous interview with FierceHealthPayer, Beilenson touted Evergreen’s efforts to share claims data with primary care providers in its network to design interventions for high-cost patients.

Evergreen currently gets about 75% of its business from small- and large-group plans, according to a company spokesman. The insurer is working with investors and federal and state regulators on a deal to switch to a for-profit entity that is expected to close in the first half of 2017, Beilenson added in an emailed statement.

“When the conversion is done, Evergreen will be in a much stronger financial position than we have ever been and, as a result, even better able than before to provide the high-quality, affordable services that our members have come to expect from us,” he said.