Evergreen Health to go for-profit in Maryland insurance market
- HMO startup Evergreen Health got a green light to shift to for-profit status, with Maryland Insurance Commissioner Al Redmer’s signing of an administrative order this week.
- The insurer, which has been trying to shift to for-profit status since October, will be acquired by JARS Health Investments, Anne Arundel Health System and LBH Evergreen Holdings.
- The final approval follows testimony last week before the insurance administration. The investors maintained that keeping Evergreen in the individual health plan market is good for competition and that moving into the insurance business complements their long-term strategic goals, Washington Business Journal reported.
Evergreen — once a shining star among the 23 co-ops established under the Affordable Care Act — has been looking for a lifeline since receiving a $24.2 million bill from the federal government for ACA’s controversial risk adjustment program..
In August, a U.S. appeals court ruled Evergreen must make the $24.2 million payment, despite a pending lawsuit against CMS that challenged the program’s payment methodology. Two other health co-ops, New Mexico Health Connections and Minuteman Health of Massachusetts, filed a similar suit in July 2016.
Prior to getting the risk adjustment bill, Evergreen had been on track to make a profit in 2016. The Maryland co-op decided to transition to for-profit status in October and filed for the necessary regulatory approvals. Evergreen was forced to drop out of this year’s individual insurance market, sending about 9,000 Maryland residents in search of new health plans.
With the acquisition, the company will now have the money to repay that debt and resume operations in the Maryland exchange.
Evergreen’s move to the for-profit sector leaves just five of the original co-ops still standing. The bulk of the original 23 co-ops either failed or were on financial thin ice and shuttered.
- Maryland Insurance Administration Maryland Insurance Administration Issues Order Approving Evergreen Health, Inc. to Convert to For-Profit Status and Be Acquired By Investors
- Washington Business Journal Evergreen Health cleared to become for-profit, stay in business in Maryland