Struggling CO-OPs, small insurers form coalition to push for change

Faced with the news that two more consumer operated and oriented health plans (CO-OPs) are shutting down, some CO-OPs and small insurers have formed a coalition to push for changes to the Affordable Care Act that they say are making it difficult for them to succeed, according to a report in the Wall Street Journal.

Colorado HealthOP announced Friday it would go out of business. The same day, nonprofit Health Republic Insurance announced it will not offer plans on Oregon's exchange next year. Other CO-OPs have folded in Louisiana, Iowa, Nevada, and most recently, Tennessee and Kentucky. 

The new coalition is being formed by dozens of surviving CO-OPs, smaller insurers and new benefit providers that say they won't survive without changes to the ACA, Martin Hickey, chairman of the National Alliance of State Health CO-OPs, told the WSJ. The group will push to change the so-called risk adjustment formula, which collects funds from insurers that are more successful on the exchanges and distributes those payments to less successful insurers to lessen their financial risk, along with another health law program that aims to offset insurers' financial losses.

So far more than 500,000 people have lost their CO-OP coverage, according to the article.

In a message to Colorado HealthOP members about its closure, CEO Julia Hutchins called the Colorado Division of Insurance's decision to not allow the CO-OP to sell plans through the Colorado marketplace in 2016 "irresponsible and premature." 

Health Republic Insurance, meanwhile, blamed the federal government's decision to pay insurers just 12.6 percent of their requested risk corridor funding to help cover their financial risk, saying it would result in a hit of more than $20 million. The company previously shut its CO-OP in New York state.

To learn more:
- read the Wall Street Journal article
- check out the Colorado CO-OP message
- here's the Oregon CO-OP statement

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