Following in the footsteps of eight other consumer operated and oriented plans (CO-OPs) before it, South Carolina's Consumers' Choice Health Insurance Co. has announced that it will stop selling health coverage in 2016, the Associated Press reports.
CO-OPs, which are state-based nonprofit insurers that offer plans on the Affordable Care Act exchange, have struggled to meet enrollment goals and remain financially viable. Of the 23 CO-OPs created by the ACA, those operating in Colorado, Oregon, Tennessee, Iowa, Kentucky, Nevada, Louisiana and New York have shut down.
Finances were the main cause of the demise of Consumers' Choice as well, Ray Farmer, director of the South Carolina Department of Insurance, tells the AP. "I did not have the confidence that this company would be a viable entity throughout the entire year of 2016," he said.
The plan's closure will force 67,000 individuals and business customers to look for new coverage, according to the article.
Like some of its fellow CO-OPs, Consumers' Choice faced financial struggles in part due to uncertainty about how much it will collect in risk corridor payments, says the plan's CEO, Jerry Burgess. The federal government recently announced it will be able to pay insurers only $362 million out of the $2.87 billion they are owed through the program, which was designed to lessen the risk of operating on ACA exchanges.
In response to their increasing woes, dozens of the remaining CO-OPs and other small insurers recently formed a coalition to advocate for changes to ACA policies that they say are causing them to fail, including the risk corridor program.
To learn more:
- read the Associated Press article
Struggling CO-OPs, small insurers form coalition to push for change
Some insurers will take hit from risk corridor program shortfall
OIG report finds CO-OPs underperformed, didn't reach enrollment goals
Kentucky CO-OP's demise not likely to be the last
Execs well-paid even as CO-OPs struggle