Court petitioned to liquidate CoOportunity Health

Iowa Commissioner Nick Gerhart filed a petition with the Polk County District Court on Thursday, seeking the liquidation of not-for-profit health insurer CoOportunity Health.

The health co-op was set up with $146 million in federal funds under the Affordable Care Act and was licensed to do business in 2013. State regulators took control of CoOportunity at the end of December.

CoOportunity had too many members for its reserves and only had about $13 million in cash and assets on hand as of Dec. 31, according to court documents.

The Insurance Division noted in the petition that CoOportunity's cash and assets had decreased by $15 million between Nov. 30 and Dec. 31. It also had unreported claims of at least $150 million.

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

Most of CoOportunity's assets consist of accounts receivable from CMS, and will not be received until late 2015.

A hearing on the petition will be scheduled in February. The Insurance Division said last week that an order to liquidate the company should take effect on Feb. 28.

During liquidation, the Insurance Division said Gerhart will wind down the company's operations under court supervision, while the health insurance guaranty associations in Iowa and Nebraska will assume responsibility for paying the claims of CoOportunity's health care providers.

The 20 or so insurance companies who make up the guaranty associations will be assessed a portion of the costs, the insurance division said earlier in January. This would be determined by each carrier's share of the market.

Gerhart is urging those who still have a CoOportunity health plan to change carriers. Open enrollment will end on Feb. 15. The state has indicated that a special enrollment period will be offered March 1 through April 29, the state said. To avoid a gap in financial assistance, individuals must enroll in a new health plan by Feb. 28

CoOportunity had about 120,000 members - far more than original projections - in Iowa and Nebraska when state regulators took over in December. Since it entered into rehabilitation, more than 53,000 have found another insurance carrier - 14,521 in Iowa and 38,838 in Nebraska.

Coventry Health Care is now the only insurer selling plans eligible for subsidies on the marketplace.