Kentucky's nonprofit health insurer cooperative established under Obamacare announced it will be shutting down due to financial troubles. As a result, 51,000 individuals will lose their health insurance plans at the end of the year.
It turns out, not everyone enrolled in health insurance plans through state-level co-ops pay their premiums. Gee, it's almost like Republicans predicted this might be an issue.
The fifth such co-op to close, the remaining 18 are all on equally unstable footing. 21 of the 23 co-ops were losing money at the end of 2014, and 11 have received warning letters.
According to
The Hill:
Kentucky Health Cooperative, a nonprofit insurer known as a co-op, explained that it could not stay financially afloat after learning of a low payment from an ObamaCare program called “risk corridors.”
That program was intended to protect insurers from heavy losses in the early years of the health law by taking money from better-performing insurers and giving it to worse-performing ones.
...However, the Obama administration announced on Oct. 1 that the program would pay out far less than requested, because the payments coming in were not enough to match what insurers requested to be paid. Therefore, insurers only will receive 12.6 percent of the $2.87 billion they requested.
“It is with sadness that we announce this decision," the insurer’s CEO, Glenn Jennings, said in a statement. "This very difficult choice was made after much deliberation. If there were a way to avoid it and simultaneously do right by the members, providers and all others that we serve, we would do so.”
The Department of Health and Human Services says that it recognizes that the low payments to insurers could have raised financial concerns for some insurers, and that as start-ups, not all co-ops would succeed.
...Twenty-one of 23 co-ops nationwide were losing money as of Dec. 31, the HHS inspector general report found in July. Furthermore, enrollment was falling below projections for 13 of the 23 plans.
The Kentucky co-op closure announcement comes only a few weeks after the nations largest co-op in
New York announced it would be shutting down.
