Dive Brief:
- South Carolina's Consumers' Choice Health Insurance Co. announced Thursday it will not be selling policies in 2016, making it the ninth health insurance co-op created under the ACA to fail.
- The shutdown will displace 67,000 customers who will need to seek coverage elsewhere.
- The decision to close was a mutual one made between the co-op and state regulators, according to Ray Farmer, director of the South Carolina Department of Insurance.
Dive Insight:
It appears the less-than-expected protection from the risk corridors program was the nail in the coffin for Consumers' Choice. The group says it was hurt by the federal government only paying out 13% of what insurers requested.
“The recent announcement of a risk corridor reimbursement of just 12.6% cast doubt on the collectability of tens of millions of dollars through the federal risk corridor program and led to an unavoidable outcome,” Consumers' Choice CEO Jerry Burgess said in a prepared statement. The announcement did not state exactly how much the co-op was expecting and failed to receive.
Farmer told the media the company was in a "financially hazardous condition" and he did not have confidence it could remain viable thorughout 2016.