CoOportunity Health’s future to be decided soon

CoOportunity Health's fate could soon be decided. The Iowa Insurance Division said it hopes to reach a decision on whether or not to liquidate the company in the next few weeks.

In the interim, the Insurance Division issued new guidance throughout the week to insurance brokers, health care providers, pharmacies, and CoOportunity Health members answering questions relating to claims and health care coverage.

The health co-op was set up through federal funding under the Affordable Care Act and was licensed to do business in 2013. State regulators took control of the not-for-profit health insurance company at the end of December.

The company had too many members for its reserves and only had about $17.2 million in cash and assets on hand. 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.

Though CoOportunity Health remains in 'rehabilitation,” the insurance division is 'strongly encouraging” individuals and groups to explore other coverage options based on its 'recent decisions and developments.”

CoOportunity Health had about 120,000 members - far more than original projections - in Iowa and Nebraska when state regulators took over in December. But the Insurance Division said that number since has fallen to about 108,000.

Those who decide to enroll in coverage with another carrier will have a new deductible time period.

They didn't wait

Dawn and James Moriarty are two members who opted to change their coverage immediately to Coventry Health Care - now the only insurance company on the Iowa's marketplace - rather than wait to see what happens to the company.

James Moriarty said the couple originally chose CoOportunity Health in 2013 because they liked the idea of not-for-profit co-ops. He also decided to not shop around during 2014's enrollment season because he didn't perceive the premiums as too high.

But upon learning of the co-op's financial problems, he called his insurance agent to find out what his options were, then on Dec. 24 switched to a Coventry Health Care plan.

The plans are similar, he said, in costs and coverage.

But Moriarty expressed his disappointment that the co-op is having financial problems and that they now have limited options.

'But I really haven't had any negative or positive experiences (with Coventry) yet,” he said.

Individuals who decide to not switch carriers must continue to pay their premium to keep the coverage they have with CoOportunity Health and prevent a lapse in coverage, the insurance division said. The health plans consumers enrolled in through the marketplace remain eligible for tax credit subsidies.

Claims payments

But the insurance division stressed that this could change if CoOportunity Health is liquidated at a later date.

That's because, if the company were to be liquidated, the Guaranty Associations of Iowa and Nebraska - made up of all licensed health and life insurance companies - would take over claims payments of up to $500,000 per member.

But this health plan may not be certified by the insurance marketplace and could jeopardize members' tax credits, said Tom Alger, Iowa Insurance Division spokesman.

Alger said the 20 or so insurance companies who make up the guaranty associations would be assessed a portion of the claims and liquidation costs. This would be determined by each carrier's share of the market.

'The biggest guy in the room would pay the largest amount,” he added, referring to Wellmark Blue Cross and Blue Shield, Iowa's dominant insurance carrier.

The insurance division also asked providers and pharmacists to continue accepting CoOportunity plans, telling them that they will continue to be paid for services and care, though at a slower rate than normal.

Pharmacy prescriptions are limited to a 31-day fill.