Dive Brief:
- The state of Ohio's InHealth Mutual insurance cooperative is the latest co-op created under the Affordable Care Act to fail following ongoing financial struggles, reported The Columbus Dispatch.
- The Ohio Department of Insurance has taken over operations as it prepares to wind down and liquidate the company.
- The insurer currently covers almost 22,000 people who are being advised to find a new plan within 60 days. InHealth's failing leaves 10 of the original 23 ACA co-ops to continue operations.
Dive Insight:
Signs of trouble have been brewing since the insurer drew increased federal oversight in mid-2015, yet the co-op made it into 2016 while others fell like dominoes around it.
Further trouble came soon, however, when the insurer controversially cut the OhioHealth hospital system from its provider network just as open enrollment was ending, leaving 2016 enrollees little to no time to change their minds.
The Ohio Department of Insurance argued InHealth Mutual was too financially weak to remain in business. “Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” Lt. Gov. Mary Taylor said in a prepared statement.
Earler this month, the CMS lifted restrictions to allow the remaining co-ops to seek private capital. However, some experts note that the remaining co-ops, it's all about getting the risk adjustment right for long-term sustainability.