Page 7 - ATD12DEC2015
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U.S. NEWS A7
Saturday 12 December 2015
US Financial Front:
Lone profitable ACA insurance co-op now losing millions
TOM MURPHY tion by liberals who initially ual enrollment for 2016 in
wanted a government-run order to ensure “that we
AP Business Writer insurer to compete with are able to provide the
for-profit companies that same level of care and ser-
The lone health insurance control the U.S. commer- vice that we provided last
cial coverage market. year.” He said the coop-
cooperative to make The cooperatives, like other erative was not in danger
health insurers, have been of closing.
money last year on the Af- hit by soaring medical and Community Health Options
prescription drug costs. is spending 89 percent of
fordable Care Act’s pub- Plus they’ve had to spend the premiums it collects on
money building a network medical costs and claims.
lic insurance exchanges is of care providers, negoti- Laszewski, the health care
ating rates with them and consultant, said small co-
now losing millions and sus- then marketing their plans ops probably don’t want
to customers. They have to spend more than 85
pending individual enroll- also received consider- percent of their premiums
ably less financial support on claims. Aside from pay-
ment for 2016. than they expected from ing claims, insurers need to
a federal government pro- collect enough revenue to
Maine’s Community gram designed to support run theirbusiness.q
insurers as the exchanges
Health Options lost more got under way. “It is prob-
ably impossible for a start-
than $17 million in the first up in the health insurance
space to make any signifi-
nine months of this year, cant money in the first cou- This photo shows The UnitedHealth Group Inc.’s campus in
ple years,” said Standard
after making $10.9 million & Poor’s analyst Deep Ba- Minnetonka, Minn. UnitedHealth Group Inc. recently reported
nerjee. Established players
in the same period last also have struggled to sell deep losses from its exchange business and said it would
coverage on the ACA’s
year. A spokesman said state-based health insur- decide next year whether to even remain in the exchanges in
ance exchanges, which
higher-than-expected are a key element behind 2017. (AP Photo/Jim Mone)
the law’s push to cover
medical costs have hurt millions of uninsured peo- far this year are 72 percent Spokesman Michael Gen-
ple. UnitedHealth Group
the cooperative. The an- Inc. recently reported higher than what the insur- dreau said the company
deep losses from its ex- er recorded all of last year. decided to freeze individ-
nouncement casts further change business and said
it would decide next year
doubt on the future of the whether to even remain in
the exchanges in 2017. But
cooperatives, small non- other insurers like the Blue
Cross-Blue Shield carrier
profit insurers devised dur- Anthem Inc. and Medicaid
coverage provider Molina
ing the ACA’s creation to Healthcare Inc. have said
they are making money off
inject competition in insur- their exchange business.
Maine’s Community Health
ance markets. These co- Options booked about
$217 million in medical
ops immediately struggled costs through the first nine
months of this year, as its
to build their businesses. A enrollment approached
71,000 people. Its costs so
dozen of the 23 created
have already folded.
An Associated Press review
of financial statements
from 10 of the 11 surviving
co-ops shows that they lost,
on average, more than
$21 million in the first nine
months of this year. Those
losses range from $3.9 mil-
lion reported by Mary-
land’s Evergreen Health
Cooperative to $50.7 mil-
lion booked by Land of Lin-
coln Mutual Health Insur-
ance Co. in Illinois.
“Clearly the remaining
health care co-ops are in
dire circumstances,” said
Robert Laszewski, a health
care consultant and for-
mer insurance executive
who has been a frequent
critic of the Affordable
Care Act. “I don’t know
how any of them can sur-
vive another year.”
The state-based co-ops
were seen as a fallback op-
