A nonprofit insurer in Nevada created by Obamacare to present competition to already established insurance carriers will close at the end of the year after reporting tens of millions in operating losses.
The Las Vegas Review-Journal reported that Nevada Health Co-Op, launched in 2012 and supported by federal loans amounting to $65.9 million, will not offer health coverage for 2016.
Current health plans will remain active through December 2015, and enrollees will be able to sign up for alternate coverage beginning next year when open enrollment commences in November.
On Wednesday, the co-op’s CEO Pam Egan blamed the closure on high claims costs and limited growth forecasts, which she said have made it "clear" that the nonprofit insurer would face difficulty offering "quality care at reasonable rates" next year.
"[Nevada Health Co-Op] is working responsibly and proactively with the Nevada Division of Insurance and the Centers for Medicare and Medicaid Services to ensure that we meet all deadlines and fulfill obligations to our current members," Egan said.
The co-op reported a $19.3 million operating loss in 2014 followed by a $3.5 million loss in the first quarter of 2015 through March. Between January and the end of June, the nonprofit saw a $22.7 million operating loss.
"Unfortunately, market conditions ultimately proved more challenging for them than expected," acting state Insurance Commissioner Amy Parks said in a statement Wednesday.
The Nevada Health Co-Op is the fourth of 23 co-ops nationwide to shutter its doors, following similar failures in Louisiana, Iowa, and Vermont.