Struggling CO-OPs enter a pivotal year amid signs of potential growth

Although nearly half of Affordable Care Act consumer operated and oriented plans (CO-OPs) shut down, and many reported multi-million losses last year, officials say 2016 could be a rebound year for the frequently maligned plans, according to the Associated Press.

Last week, a Senate subcommittee blamed officials at the Centers for Medicare & Medicaid Services (CMS) for authorizing more than a billion dollars in loans to CO-OPs despite clear signs of financial distress. The struggling CO-OPs have been a frequent target of criticism from lawmakers that say CMS encouraged the plans to "cook their books."

Despite overwhelming losses in 2015, CO-OP officials say enrollment is growing and a healthier patient mix is mitigating the losses suffered during the previous year. CO-OP enrollment surged to 350,000, three times the total in 2014, according to the AP.

Although 2015 losses ranged from $10 million to more than $90 million in 2015, Kelly Crowe, CEO of the National Alliance of State Health CO-OPs, told the AP that plans are still fragile, but they are showing signs of improvement.

For example, Evergreen Health in Maryland turned a profit in three of the last six months of 2015, and thanks to younger, healthier enrollees, the plan expects to be profitable in the coming year. Montana's CO-OP raised premiums 36 percent without losing membership and found some relief when the state expanded Medicaid and took on high-cost patients.

Still, the plans face several barriers. CO-OP leaders say the beneficiary risk adjustment formula favors established insurers, and a federal program designed to help CO-OPs manage large medical bills is set to expire this year.

CO-OP failures have emerged as a political talking point amid reports that the government failed to act on flailing plans. Last year, the Office of Inspector General (OIG) found nearly all of the 23 CO-OPs failed to meet initial enrollment goals, and CO-OP leaders have said it will be nearly impossible to pay back more than $1 billion in loans provided to failed plans.

To learn more:
- read the AP article

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