Dive Brief:
- Community Health Options of Maine, the only health insurance co-op that made a profit in 2014 through the ACA exchanges, has reported high losses for 2015 and plans to halt sales of individual and family coverage for 2016.
- The insurer lost more than $17 million during the first nine months of 2015, compared to making $10.9 million during the same period of 2014, as a result of higher-than-expected medical costs, the Associated Press reports.
- The AP's review of 10 of the 11 remaining co-ops (from the 23 that were initially created) finds that on average, they lost about $21 million in the first nine months of 2015. The losses ranged from $3.9 million at Maryland's Evergreen Health Cooperative to $50.7 million at Illinois' Land of Lincoln Mutual Health Insurance Co.
Dive Insight:
While Community Health Options had initially stood out as an early success story, the fact that it is now losing alongside the other co-ops raises further debate about the co-ops' future sustainability.
Despite its decision to halt individual enrollment for 2016, spokesman Michael Gendreau said the co-op is not in danger of closing.
"It is probably impossible for a startup in the health insurance space to make any significant money in the first couple years," Standard & Poor analyst Deep Banerjee told the AP, suggesting co-ops will likely struggle into 2016, adding, "What it comes down to is they need to turn a profit very quickly because the funding source is drying up."