- Maryland health co-op Evergreen Health will not be able to enroll or renew individual policyholders in the state’s insurance exchange, Maryland Insurance Commissioner Al Redmer said Thursday.
- The HMO startup has been trying to switch to a for-profit status since October following a financial crisis earlier this year.
- With Evergreen out of the individual health insurance market, about 9,000 people need to find new carriers by Dec. 15 to ensure coverage on Jan. 1, the Baltimore Business Journal reports.
With only 25% to 35% of its business in the individual market, Evergreen had expected to turn a profit in 2016. However, that prediction was upended when the federal government billed the co-op for a $24.2 million risk-adjustment payment.
In June, Evergreen filed suit against CMS, seeking relief from the controversial risk-adjustment program. The lawsuit sought to prevent the agency from collecting what would amount to about 26% of its $84 million in 2015 premium revenue, claiming the risk-scoring formula CMS uses favors big, wealthy insurers over new, smaller ones. Yet the U.S. Court of Appeals for the Fourth Circuit sided with CMS, ruling in August that the co-op must pay the $24.2 million pending its lawsuit against the government.
“After many months of working closely with Evergreen management, leadership at the Centers for Medicare and Medicaid Services and outside investors to find a workable solution, we have run out of time to meet the deadline for a January 1 effective date," Redmer said in a statement. “We remain committed to a viable, competitive insurance industry in Maryland.”
Evergreen will still be able to participate in the small and large group insurance markets in Maryland, and members in those plans won’t be affected.