Former Obamacare Co-op’s 2018 Coverage Terminated Due to Financial Risk

Co-op was put in receivership and had reduced amount of capital cushion


Former Obamacare co-op Minuteman Health, which served the states of Massachusetts and New Hampshire, has had their 2018 coverage terminated by the state, according to an announcement from the state's insurance commissioner.

In June, the Obamacare co-op said it was exiting the Affordable Care Act exchanges and was planning to organize a new entity, Minuteman Insurance Company. On August 2, 2017, the company was put in receivership by the state.

Since the company was put in receivership, the state received more financial information about the former co-op, which has led the state to terminate all plans after 2017.

"This information shows that MHI has adequate funds to pay all insurance claims in the normal course of business, but it also shows that the capital ‘cushion' is reduced," the insurance commissioner said. "Considering the financial risks associated with continuing to provide coverage after December 31, 2017 and the benefits of accelerating the wind-up of MHI's operations, the Receiver decided to seek authority to terminate all coverage as of that date."

Minuteman Health had high start-up costs and issues with Obamacare's risk-adjustment program, which shifts money away from those companies with healthier customers to those with sicker enrollees.

"Unfortunately, the program has not worked as intended," the former co-op said. "The program also unfairly penalizes issuers like MHI that are small, low cost, and experience high growth."

The insurance commissioner also said that Minuteman Health originally received about $154 million in loans from the federal government, which had been diminished, and additional funds were not available.

"MHI's capital is ‘thin,'" the insurance commissioner said. "However, approximately $25 million of MHI's liabilities are for a loan from the United States which is subordinated to MHI's insurance claim obligations."

"Recent financial reports suggest that this ‘cushion' is eroding somewhat faster than initially anticipated but that it will still be sufficient to make full payment to members and their health care providers on all policy-related claims," the commissioner said. "Moving now to terminate all business effective December 31, 2017 will help to maintain adequacy of the ‘cushion.'"

There were originally 23 co-ops created through the Affordable Care Act. Many have either completely closed or are not offering coverage on the Obamacare exchanges.

Ali Meyer

Ali Meyer   Email Ali | Full Bio | RSS
Ali Meyer is a staff writer with the Washington Free Beacon covering economic issues that expose government waste, fraud, and abuse. Prior to the Free Beacon, she was a multimedia reporter with where her work appeared on outlets such as Drudge Report and Fox News. She also interned with the Heritage Foundation and Pacific Research Institute. Her Twitter handle is @DJAliMeyer, and her email address is

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