Newstrack: More health co-ops close

Former CoOportunity customers' coverage ended last month

CoOportunity Health logo
CoOportunity Health logo


On Dec. 24, 2014, the Iowa Insurance Division took control of the not-for-profit health insurer CoOportunity Health due to major financial troubles.

CoOportunity Health, one of two insurers selling plans on the state exchange, had too many members for its reserves and not enough cash on hand. The Insurance Division began liquidating the insurance carrier, which received about $146 million in federal funding to get it running, in February.

What’s happened since

In the months since CoOportunity Health’s collapse, the state has worked to wind down the company’s operations under court supervision and thousands of people have had to move to other health plans or face higher premiums.

Health coverage for the 300 or so individuals remaining on CoOportunity Health plans finally ended on Aug. 31, said Chance McElhaney, communications director and legislative liaison for the Iowa Insurance Division.

The state is now waiting to collect money that it is due, which will be used to pay the creditors of the carrier.

“We’ll be working with the (Polk County) District Court as they decide pursuant to Iowa liquidation law how to distribute any assets recovered,” McElhaney said.

Health co-ops were created under the Patient Protection and Affordable Care Act with the aim to introduce more competition in the insurance marketplace and drive down prices. At its peak in 2014, CoOportunity Health, which sold plans in Iowa and Nebraska, had more than 120,000 members — outpacing its 2016 enrollment goals.


But that, compounded with the fact that it could not obtain additional funds from the federal Centers for Medicare and Medicaid Services (CMS), forced CoOportunity into a tough financial spot.

And while CoOportunity Health may have been the first health co-op to fail, it’s no longer alone, as two other co-ops have announced plans to close due to financial struggles.

Modern Healthcare magazine reported in late July that the Louisiana Health Cooperative will stop operations at the end of 2015. The insurer had lost $5.7 million in 2014 and was asking the state for a 23 percent premium hike for 2016 health plans.

“Though losing a member is never easy, it’s noteworthy that Louisiana Health Cooperative is making this choice on its own accord, and doing so in a way and at a time that minimizes impacts to its policyholders, providers and the state and federal governments,” said Kelly Crowe, chief executive officer of the National Alliance of State Health Co-ops (NASHCO), in a statement.

The Las Vegas Sun reported in late August that the Nevada Health Co-op also will close at the end of the year due to high costs.

The health co-op alliance acknowledges the challenges that the remaining 20 co-ops face, but believes they will work through the difficulties.

“NASHCO strongly believes that co-ops will continue their early progress in providing a new form of quality and affordable health insurance to those who need it most,” Crowe said in a statement.



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