Another Obamacare Co-Op Exits Exchanges, Leaving Only 5 Co-Ops in 2017

Majority of remaining co-ops are losing money and struggling to stay in business

December 19, 2016

Evergreen Health Cooperative Inc. of Maryland announced earlier this month that it is withdrawing from the Affordable Care Act exchanges next year, leaving only five co-ops in operation. The co-op will not offer or renew individual health policies in 2017.

While Evergreen Health will no longer offer plans on the Affordable Care Act exchange market, the company will continue to operate off the exchanges as it converts to a for-profit entity.

"After many months of working closely with Evergreen management, leadership at the Centers for Medicare and Medicaid Services, and outside investors to find a workable solution, we have run out of time to meet the deadline for a January 1 effective date," said Maryland Insurance Commissioner Al Redmer Jr. "We remain committed to a viable, competitive insurance industry in Maryland."

This action will force 6,000 customers serviced by the co-op to be automatically enrolled in new plans. The co-op was awarded $65.5 million in taxpayer-funded loans in 2012.

Of the 23 co-ops originally created under Obamacare, 18 will no longer offer individual plans including Evergreen Health, as well as co-ops serving New Jersey, Illinois, Connecticut, Arizona, Colorado, Kentucky, Michigan, Nevada, New York, Ohio, South Carolina, Tennessee, Louisiana, Utah, a co-op that served both Iowa and Nebraska, and two co-ops that served Oregon.

Of the five co-ops that are remaining, the majority of them are seeing losses. Community Health Options, the co-op serving Maine, had 4.7 percent lower membership at the end of October and had a net loss that was 31.3 percent worse than what was forecasted.

Minuteman Health, Inc., the co-op serving Massachusetts and New Hampshire, reported a loss of $735,375 in the nine months ending on Sept. 30. The co-op serving Wisconsin, the Common Ground Healthcare Cooperative, lost $16.9 million in the first half of 2016 and had to secure funding to ensure that it would stay in business and sell plans in 2017.

Earlier this year, Kevin Counihan, a top official for the Centers for Medicare and Medicaid Services, told lawmakers that the remaining co-ops were on corrective action plans and could not give any assurance that the remaining co-ops would not fail.

The Centers for Medicare and Medicaid Services did not respond to requests for comment by press time.

Update Dec. 20, 2:57 P.M.: This post has been updated to clarify that Evergreen Health will continue to operate its business off the Affordable Care Act exchange market.