Iowa's insurance commissioner announced Friday that he will seek liquidation of the state's CoOportunity Health, reported the Des Moines Register. The order should take effect on Feb. 28.
Commissioner Nick Gerhart noted that the company did not have enough money to handle its customer's medical claims. Gerhart said that the insurer's downfall came after CoOportunity's request for more federal funds was denied by federal officials.
Gerhart also mentioned that the insurer was unable to receive private loans, comparing CoOportunity Health to a small business that had its line of credit suspended.
What's more, CoOportunity Health's pool was not only larger than expected; it was also sicker. Many sick residents opted for CoOportunity Health after learning Wellmark would not offer plans on Iowa's exchange. It didn't help that Congress cut the amount of money the insurer would receive through the so-called risk corridor program, which reimburses insurers who take on new members who are sick and therefore expensive.
The news comes as a disappointment for many consumers, especially considering that CoOportunity enrolled more than 35,000 members by Jan. 1, surpassing its first-year target of 12,000 members, and earned $127 million dollars in premium volume.
Many of CoOportunity's customers used federal subsidies to help pay for their health insurance. In order to avoid a disruption of subsidized coverage, such individuals need to choose another carrier by Feb. 15. In most of Iowa, that choice will be Coventry Health, since Wellmark is not selling plans this open enrollment period, noted the article.
- here's the Des Moines Register article