Dive Brief:
- Louisiana Health Cooperative Inc., the state's failing nonprofit health insurer, has been taken over by the Louisiana Department of Insurance. State regulators have already been on site since late July.
- State law allows insurers to be placed in "rehabilitation" under certain circumstances, such as when it is deemed hazardous to allow the company to continue doing business.
- The department’s request to take possession of the insurer was granted by a district judge last week. It acknowleges Insurance Commissioner Jim Donelon may “conduct all of the business and affairs” of the co-op.
Dive Insight:
The co-op, which has the backing of the Centers for Medicare and Medicaid Services, will have the ability to pay its claims but may not have the ability to pay its debts.
“Our on-site review and analysis of the Louisiana Health Cooperative’s operations led us to the decision that placing it in rehabilitation is in the best interests of its policyholders and providers, as well as taxpayers,” Donelon is quoted by The Advocate.
While the co-op claims to be just barely in the black with a second-quarter report showing $180,000 in capital and surplus, their capital is below the minimum required to continue operations. HMOs in the state are required to maintain $3 million in capital and surplus.
Customers are being told to find new coverage for 2016 because the co-op will cease coverage after Dec. 31.