Co-op Performance by State

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Repeal >> Components of ACA Not Working Well >> Health Exchanges >> Nonprofit Consumer Operated and Oriented Plan Organizations (CO-OPs)  >> Performance by State (last updated 9.30.17)

CO-OP Failure Countdown

According to SNL Financial, by 2.25.16, eight of the nation’s remaining 11 consumer operated and oriented health plans face increased scrutiny from the federal government over their long-term viability. A source familiar with the co-ops’ finances said that only New Mexico Health ConnectionsMontana Health Cooperative and Massachusetts’ Minuteman Health Inc. are not currently subject to additional oversight. “That means that the co-ops under corrective action plans are Wisconsin’s Common Ground Healthcare Cooperative, Maryland’s Evergreen Health Cooperative Inc.Freelancers Consumer Operated & Oriented Program of New Jersey Inc.HealthyCT Inc., Ohio’s Coordinated Health Mutual Inc. (InHealth), Illinois’ Land of Lincoln Mutual Health Insurance Co., Maine’s Community Health Options and Oregon’s Health CO-OP.”
Since that report, Ohio’s InHealth, HealthCT, Oregon’s Health CO-OP, Land of Lincoln Mutual Health and  Minuteman Health have announced termination of business operations. There were, as of 7.13.16, seven remaining CO-OPS serving ten states, six of them having been placed on corrective action. New Jersey’s CO-OP failure on 9.12.16, Maryland’s closure on 12.8.16, and Minuteman Health withdrawal on June 23, 2017,  brings the number of surviving CO-OPs to four.

Arizona (failed)

  • Federal Loans. Compass Cooperative Mutual Health Network, Inc. d/b/a Meritus Health Partners Service received $93,313,233 in federal start-up loans.
  • Closure Announced. Meritus Health Partners Service announced it would be closing its doors on October 30, 2015. Executives with Arizona’s nonprofit health insurance co-op announced 11.24.15 that they have failed to come up with additional financial backing and the insurer plans to shut down all operations December 31, 2015.
  • Enrollment: According to the Department of Health and Human Services Office of the Inspector General, just 869 Arizonans purchased plans by the end of 2014. The CO-OP projected it would enroll 23,998 consumers. In 2015, though, the co-op offered some of the cheapest plans on the federal exchange and enrolled more than 56,000 consumers as of June 30, regulatory filings show. (Daily Signal, 11.2.15) When the CO-OP announced for certain in late November that it would be closing Arizona Capital Times reported that “59,000 Arizonans it now covers need to find a new insurer by December 15 if they want coverage on January 1, 2016.”
  • Reason for Failure. Since the CO-OP opened in December 2012, it lost more than $78 million. Arizona Director of Insurance Director Andy Tobin filed an Order for Supervision on October 30, 2015, to place Meritus Mutual Health Partners into supervision.  Meritus declined to consent to the Order for Supervision.  (Arizona Department of Insurance, 10.30.15)
  • Meritus Placed Under Receivership. According to AP (8.12.16), “the Arizona Department of Insurance says a judge has placed the state’s failed health insurance co-op into receivership after it ran out of money to pay its debts. The order issued Wednesday allows the department to sell the assets of Meritus Health Partners and Meritus Mutual Health Partners to pay its creditors… It had been the largest Arizona insurer on the federal health insurance marketplace with more than 59,000 customers. Meritus has been winding down operations and paying hospital and doctor claims. It wasn’t immediately clear how much it still owes.”

Colorado (failed)

  • Federal Loans. The CO-OP received $72,335,129 in federal start-up loans.
  • Shut-down Announced. On October 16, Colorado Health OP was decertified from the exchange by the Colorado Division of Insurance, resulting in the CO-OP’s demise; Colorado Health OP’s 80,000 individual members will all need to transition to new carriers for 2016. (, 10.16.15)

Connecticut (failed)

  • Federal Loans. HealthyCT, Inc. d/b/a HealthyCT received $127,980,768 in federal start-up loans.
  • Shut-down Announced. The Morning Consult reported that the Connecticut Insurance Department placed HealthyCT under an order of suspension on July 5, 2016.
  • Number Losing Coverage. 40,000 policyholders will be affected, 13,000 in the individual market and 27,000 in the employer market.
  • Terms of Shut-down. According to the Morning Consult report, “the co-op cannot write new business or renew existing business after August 1 of this year, and group plans that renewed coverage as of July 1 can keep their coverage through June 30 of next year. Groups up for renewal next month on the co-op must find a new carrier. ‘This order of supervision provides for an orderly run-off of the company’s claim payment under close regulatory oversight.’” However, according to The Hill, “it is not absolutely certain that HealthyCT will shut down. The state says that based on the state of its financial picture, it is possible that the company could emerge from supervision down the line. However, the state is currently preventing new people from signing up for insurance with the company and warning existing enrollees that they should plan for the need to find new coverage when their plan expires at the end of the year.”
  • Reason for Failure. The state blames the ACA’s risk adjustment program for its financial troubles. The Centers for Medicare and Medicaid Services announced last week the co-op would be required to pay $13.4 million as part of the program this year. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain,” Wade said in a statement. (Morning Consult, 7.5.16)

Illinois (failed)

  • Federal Loans. Land of Lincoln Health Mutual Health Insurance Company (formerly Metropolitan Chicago Healthcare Council CO-OP) d/b/a Land of Lincoln Health received $160,154,812 in federal start-up loans.
  • Limiting Enrollment in 2016. Jason Montrie, president of the Chicago-based startup, emphatically offered assurances in an interview this week that the company is not in danger of shutting down. But the plan includes some short-term pain. The company will limit how many policies it writes for next year to ease some financial pressures (ACA Signups, 10.23.15).
  • Illinois Obamacare Plan Crippled by Losses. “The operating losses continue to mount at struggling Land of Lincoln Health, totaling $90.8 million for the Obamacare health plan in 2015. That net loss is almost five times greater than the Chicago-based startup reported in 2014, when it totaled $17.7 million. The insurer lost about $40 million in just the last three months of 2015, according to a new financial statement filed with national insurance regulators… A spokeswoman for the Illinois Department of Insurance did not immediately comment on Land of Lincoln’s latest financial troubles, but the agency has been keeping a close eye on the co-op. The state agency has at least two options should Land of Lincoln get into deeper financial trouble. If the co-op decides to stop selling policies altogether, it could pay outstanding claims under the department’s supervision. That process could take more than a year.” (Modern Healthcare, 3.1.16)
  • According to The Hill (7.7.16), Land of Lincoln Health has been ordered not to pay nearly $32 million owed to HHS under the risk adjustment program. “Land of Lincoln Health is currently suing the federal government for $73 million it claims it’s owed under a similar program known as risk corridors.” Yet ABC News reports “that didn’t work, according to the Illinois department’s news release, which said the federal Centers for Medicare and Medicaid Services would not suspend the company’s risk adjustment program liability.”
  • Shutdown Announced. According to ABC News, the Illinois Department of Insurance officials are seeking a court order allowing the state to take over Land of Lincoln Health and prepare the company for liquidation.
  • Number Losing Coverage. The 49,000 policyholders will be allowed a 60-day special enrollment period to find and purchase new health coverage. “During the transition, policyholders must continue to pay their premiums to maintain their coverage and health care providers must continue to honor their contracts for service to patients, according to a department news release.” (ABC News, 7.13.16)

Iowa/Nebraska (failed)

  • Federal Loans. CoOportunity Health (formerly Midwest Members Health) received $145,312,100 in federal start-up loans. CMS terminated the loan agreement with the Iowa/Nebraska CO-OP on February 28, 2015 (p. 11).
  • Takeover by Iowa State Officials. “A startup insurance company loaned $145 million by the U.S. government under Obamacare is running out of money and being taken over by state officials in Iowa. The company, CoOportunity Health, which also serves Nebraska, was placed under Iowa Insurance Commissioner Nick Gerhart’s supervision this week and is no longer accepting new enrollees, according to a statement from his office. While Gerhart’s agency will operate the company for the time being, it’s urging policyholders to seek a new insurer.” (Bloomberg News, 12.26.14)
  • Co-op Liquidated. CoOportunity Health, which served Nebraska and Iowa, was liquidated in March, 2015. (Liberal Logic 101, 9.29.15)
  • Number Losing Coverage. As a result of CoOportunity Health’s liquidation, nearly 120,000 Nebraskans and Iowans lost coverage (Adrian Smith, WSJ, 11.3.15)
  • Reasons for Failure. “The Affordable Care Act set aside funding for health care co-ops, to enable the organizations to compete in places where there aren’t many insurers. CoOportunity Health was the second- largest co-op in the country in terms of membership, and one of the largest in terms of the federal funding it received. But then CoOportunity hit a kind of perfect storm, says Peter Damiano, director of the University of Iowa’s public policy center. First, the co-op had to pay a lot more medical bills than those in charge expected. ‘CoOportunity Health’s pool of people was larger than expected, was sicker than expected,’ Damiano says…Not only were the patients sicker, but CoOportunity’s leaders initially thought they would enroll about 12,000 people in Iowa and Nebraska. They got about 10 times that.” (NPR, 1.14.15)
  • Court Rejects Land of Lincoln Lawsuit Seeking More Than $70 Million. “A federal judge has tossed out Land of Lincoln’s lawsuit seeking more than $70 million that the now-defunct health insurer says it’s owed by the federal government. The insurer shut down at the end of September amid financial woes, sending 49,000 Illinoisans scrambling to find new coverage for the last three months of the year. Shortly before the insurer’s closure was announced, it sued the federal government in June for more than $70 million… Last week, a federal claims court judge sided with the government, saying the U.S. Department of Health and Human Services reasonably interpreted the law in determining the payments and that the government did not break any contract with Land of Lincoln.” (Chicago Tribune, 11.15.16)

Kentucky (failed)

  • Federal Loans. Kentucky Health Cooperative, Inc. received $146,494,772 in federal start-up loans.
  • Number Losing CoverageThe CO-OP serves about 51,000 members but will stop providing services Dec. 31. Politico reported: “The Kentucky plan dominated exchange enrollment during the first two years of operations, capturing roughly 60 percent of customers in a red state hailed as a symbol of Obamacare’s potential. Those Kentuckians will now have to scramble to find new coverage during the looming open-enrollment period, beginning Nov. 1, just as voters head to the polls to pick a new governor.”
  • Reasons for Failure. “‘Kentucky Health Cooperative has paid millions of dollars in claims on behalf of our members,’ Jennings said. The problem is that the cooperative was popular and many of the new members hadn’t received health insurance. That led to a pent-up demand for health services, which created millions in claims, the co-op said. In 2014, the co-op’s losses were about $50 million but slowed to $4 million in the first half of 2015, the company said. ‘We were on track to reverse direction and begin operating in the black, and we expected this to come about in 2016,’ interim CEO Glenn Jennings said. But last week the co-op and other insurers found they would receive less money from the federal government this year to help pay for the sickest customers.” (Washington Examiner, 10.9.15)

Louisiana (failed)

  • Federal Loans. Louisiana Health Cooperative, Inc. received $65,790,660 in federal start-up loans.
  • Federal officials approved Obamacare loans totaling $127 million last year to groups led by individuals whose backgrounds included an insider trading conviction and another with a long history of child sexual abuse, The Washington Examiner has learned…In the Louisiana case, Schilling was sanctioned for insider trading while working at Georgia-based HealthSource Inc., where he bought 1,900 shares of that company’s stock shortly after receiving a “confidential briefing” about an impending merger with CIGNA, according to the SEC. (Washington Examiner, 4.3.13)
  • Obamacare’s Louisiana CO-OP Riddled with Self-dealing, Conflicts of Interest. “Louisiana Health Cooperative’s then-Chief Executive Officer Terry Shilling signed a $4 million, four-year contract with a consulting firm last year in which he is a principal, according to documents obtained by the Washington Examiner…The Examiner also found that Louisiana Health Cooperative’s leadership ranks include seven of Shilling’s business associates, and the new co-op agreed to pay an additional $3.3 million annual fee to the consulting firm, which is registered in Georgia as Beam Partners. Besides Shilling, individuals from Beam fill three of Louisiana Health Cooperative’s director positions, two vice president slots and the chief financial officer. Eight of the top 11 co-op managers are from Beam. On top of the $4 million contract and $3.3 million annual consulting fee, Louisiana Health Cooperative also agree to an additional 20 percent ‘performance fee’ to be paid to Shilling’s firm.” (Washington Examiner, 8.21.13)
  • The Taxpayer-Funded Louisiana Co-Op Created Under Obamacare Has Collapsed. “Just two years after Obamacare’s implementation, a Louisiana nonprofit insurer that received nearly $66 million in taxpayer-funded loans is closing its doors. On Friday, the Louisiana Department of Insurance announced that the state’s consumer operated and oriented plan, or co-op, would be discontinuing its operations at the end of 2015. Louisiana’s is the second co-op created under to Obamacare to close (Daily Signal, 7.27.15).
  • Number Losing Coverage. According to the Department of Insurance, the Louisiana Health Cooperative will not be offering plans to consumers next year, but it will continue its coverage of the 17,000 Louisiana consumers currently receiving health insurance through the co-op.” (Daily Signal, 7.27.15).

Maine (suspending 2016 enrollment)/New Hampshire (failed)

  • Federal Loans. Maine Community Health Options (MCHO) received $132,316,124 in federal start-up loans.
  • “Federal officials approved Obamacare loans totaling $127 million last year to groups led by individuals whose backgrounds included an insider trading conviction and another with a long history of child sexual abuse, The Washington Examiner has learned… In the Maine case, federal officials approved a $62 million loan to Maine Community Health Options even though its president had recently committed suicide after state police accused the co-op’s president of molesting teenage boys for decades.” (Washington Examiner, 4.3.13)
  • Financial Performance. Maine’s CO-OP (which also expanded into New Hampshire this year) was the only one to make a profit in 2014 (ACA Signups, 10.23.15).
    • Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year. A spokesman said higher-than-expected medical costs have hurt the cooperative.
    • The CO-OP booked about $217 million in medical costs through the first nine months of this year, as its enrollment approached 71,000 people. Its costs so far this year are 72 percent higher than what the insurer recorded all of last year.
    • Community Health Options is spending 89 percent of the premiums it collects on medical costs and claims. (Associated Press, 12.10.15)
  • On 12.10.15, Maine’s CO-OP announced it was suspending enrollment for 2016. (Associated Press, 12.10.15) “Spokesman Michael Gendreau said the company decided to freeze individual enrollment for 2016 in order to ensure ‘that we are able to provide the same level of care and service that we provided last year.’ He said the cooperative was not in danger of closing.
  • Current Status. Community Health Options is under increased oversight from the Maine Bureau of Insurance. (, 4.26.16)
  • Future Prospects. According to Louise Norris at (4.26.16), “Community Health Options has said that they hope to resume offering new individual plans in the ‘not-so-distant future’ although it’s doubtful that they’ll have plans for sale before the 2017 open enrollment period begins, since regulators and the CO-OP have determined that the rates for 2016 (which cannot be changed until 2017) are too low to be sustainable.”
  • Expansion into New Hampshire  Community Health Options began providing  coverage in New Hampshire in 2015.
    • Closure Announced. According to Bloomberg, as of September, 2016, “Maine-based Community Health Options is pulling out of New Hampshire.”
    • Number Losing Coverage. Washington Examiner reports that Community Health Options covered 11,581 people in New Hampshire last year. Those customers will need to select a new plan in the state’s health insurance marketplace to be covered in 2017.

Maryland (failed)

  • Federal Loans. Evergreen Health Cooperative Inc. received $65,450,900 in federal start-up loans.
  • According to the Wall Street Journal (6.13.16), “Maryland’s health cooperative filed a lawsuit Monday seeking to block the federal government from requiring it to pay more than $22 million in fees for a program designed to cover insurance company shortfalls. The Maryland co-op, in its lawsuit filed in U.S. District Court in Maryland, says the formula—known as ‘risk adjustment’—is arbitrary and unlawful.”
  • According to the Washington Examiner (10.27.16), Maryland wants to shift its CO-OP, Evergreen Health, to for-profit status. “The lawmakers want the plan to repay the money it was given by the administration if it no longer meets the terms of its loan requirements with the federal government… The lawmakers contend that Evergreen must meet specific requirements in exchange for getting the taxpayer dollars, including operating as a nonprofit. Evergreen received $65 million from the Centers for Medicare and Medicaid Services.”
  • Closure Announced. On December 8, 2016, Evergreen Health Cooperative Inc. announced it will not be issuing or renewing individual health benefit policies, both on and off Maryland’s insurance exchange, Maryland Health Connection.
  • Number Losing Coverage. According to AP (12.9.16), Evergreen has about 9,000 customers, with 6,000 enrolled on the Maryland health exchange. About 4,000 will be switched to Kaiser Permanente, and 2,000 will move to CareFirst. Roughly 3,000 consumers who bought insurance directly from Evergreen or through brokers will need to find a new plan.
  • Reason for Closure. Dr. Peter Beilenson, Evergreen’s CEO, said Evergreen’s conversion from a nonprofit co-op to a for-profit company is moving forward. “When the conversion is done, Evergreen will be in a much stronger financial position than we have ever been and, as a result, even better able than before to provide the high-quality, affordable services that our members have come to expect from us,” Beilenson said in a statement.
  • Consumer Options. Current Evergreen enrollees for 2016 who purchased policies on Maryland Health Connection will be renewed into the most similar plan available in their area effective January 1, 2017, to avoid a gap in coverage. Consumers are encouraged to make a decision and choose an alternative plan by December 15, 2016, to ensure they have notification of coverage before the effective date, January 1, 2017. However, changes can be made through December 31, 2016, for January 1, 2017 coverage. If they wish to choose an alternative plan, they are advised to contact Maryland Health Connection.
    Current Evergreen enrollees for 2016 who did not purchase their policy on Maryland Health Connection (for example through Evergreen’s website) will need to obtain insurance for 2017 from an alternative insurer.

Massachusetts/New Hampshire (failed)

  • Federal Loans. Minuteman Health, Inc. received $156,442,995 in federal start-up loans. The plan serves both Massachusetts and New Hampshire.
  • On 1.17.16, the Boston Globe reported that “Minuteman’s membership has failed to meet initial projections, while expenses have exceeded them… Minuteman, which had $23 million in revenue in the first nine months of 2015, was slapped last year with $3 million in payments through a new federal program called risk adjustment… Minuteman reported a loss of $20.2 million in 2014. In the first three quarters of last year, it posted a loss of $12.7 million.”
  • According to Washington Free Beacon (3.22.17), “Minuteman Health, one of the remaining co-ops serving New Hampshire and Massachusetts, projected losses of $39 million in its 2016 annual financial statement… The federal government is charging Minuteman Health $29.8 million and $23.7 million for its projected risk adjustment payments in 2016-17, respectively. The co-op reported serious losses despite increasing its membership by 12,438 over a year and adding health care providers to its network.”
  • Shut-down. On June 23, 2017, Minuteman Health of Massachusetts and New Hampshire announced it is withdrawing from the Affordable Care Act exchanges in 2018.
  • Number Losing Coverage. According to the Washington Free Beacon (6.27.17), 37,000 enrollees will lose coverage in 2018.
  • Receivership Status. According to FOX News (8.8.17), “the Massachusetts Commissioner of Insurance announced that the Obamacare co-op is now under its control as the Supreme Judicial Court granted the commissioner receivership. The commissioner said Minuteman Health’s capitalization is very thin, and this action was done to protect policyholders and health care providers. Even though the commissioner says the co-op has limited capitalization, it notes it is still solvent and has enough funds to pay all of its insurance claims.”

Michigan (failed)


  • Federal Loans. Montana Health Cooperative received $85,019,688 in federal start-up loans.
  • 2014 Losses. Montana’s CO-OP, which lost $3 million last year, is reportedly not in danger of folding, because it has maintained strong reserves and did not expand too quickly. (ACA Signups, 10.23.15)

Nevada (failed)

  • Federal Loans. Nevada Health Cooperative (formerly Hospitality Health CO-OP) received $65,925,396 in federal start-up loans.
  • With Nevada Co-op Closing, Are More to Come? “Nevada Health CO-OP is shutting down by Jan. 1, the not-for-profit health plan announced Wednesday (Modern Healthcare, 8.27.15).
  • Number Losing Coverage. The co-op had 21,300 members as of the first quarter this year. Nevada’s exchange population was about 63,000 at that time (Modern Healthcare, 8.27.15).
  • Reasons for Closure. ‘The majority of them are still reporting losses,’ said Sally Rosen…Nevada Health CO-OP cited ‘challenging market conditions’ for its closure. Its medical-loss ratio was 103.5% as of March 31, according to a report from A.M. Best released last week. That meant it was paying out more to cover medical services than it was receiving in member premiums. It also had a 45.6% administrative expense ratio, signaling high costs for labor, technology and back-office operations” (Modern Healthcare, 8.27.15).

New Jersey (failed)

  • Federal Loans. Freelancers CO-OP of New Jersey d/b/a Health Republic Insurance of New Jersey received $109,074,550 in federal start-up loans.
  • According to Politico (7.1.16), risk-adjustment data posted by HHS indicate that Health Republic Insurance of New Jersey “took a $46.3 million haircut.”
  • On 9.12.16, announced that “the state Department of Banking and Insurance moved Monday to take over Health Republic, a consumer-operated and -oriented plan (COOP), because of its ‘hazardous financial condition.’… Once its financial condition is strengthened, Health Republic may rejoin the marketplace in 2018, the department said in a statement issued Monday.”
  • Number Losing Coverage. According to (9.12.16), the CO-OP covered 35,000 members.
  • Shutdown Plan. Individual plan members will be fully covered through Dec. 31. All claims for covered services provided by that date will be paid. Premiums will not change. Health Republic will not offer new plans for 2017. When the open enrollment period for 2017 begins on Nov. 1, individual members should chose a plan from a different carrier.

New Mexico (financially troubled)

  • Federal Loans. New Mexico Health Connections received $77,317,782 in federal start-up loans.
  • According to Axios (9.15.17), New Mexico Health Connections “is a month overdue in filing its second-quarter financial paperwork. And the co-op’s most recent documents, as well as federal ACA documents, show potentially large financial problems that could force New Mexico to shut the company down.
    • Second-quarter statutory filings from insurance companies had to be submitted to states no later than Aug. 15.
    • It lost $23 million in 2015 and $17.9 million in 2016.
    • The co-op had only $14 million of capital as of March 2017.
    • NMHC admitted in the documents that ‘management has evaluated the company’s ability to continue as a going concern.’
    • There was a major miscalculation of the ACA’s risk adjustment program, in which plans with healthier members pay into a common pool that reimburses plans with sicker members. NMHC expected to collect $7 million from risk adjustment for the 2016 plan year. But according to federal data, NMHC had to pay $8.8 million into the program — a $15.8 million swing.
    • NMHC’s independent actuary wrote a ‘qualified opinion‘ this past March, before the federal data came out, saying there was ‘significant risk and uncertainty’ in the amount the co-op expected to collect from risk adjustment.”

New York (failed)

  • Federal Loans. Freelancers Health Service Corporation d/b/a Health Republic Insurance of New York received $265,133,000 in federal start-up loans.
  • On 9.25.15, New York State authorities ordered Health Republic Insurance of New York, a nonprofit insurance cooperative, to stop writing new policies and wind down business after existing policies expire, citing the likelihood that the cooperative would become financially insolvent.
  • Regulators to Shut Down Health Republic Insurance of New York. “Regulators will shut down Health Republic Insurance of New York, the largest of the nonprofit cooperatives created under the Affordable Care Act, in the latest sign of the financial pressures facing many insurers that participated in the law’s new marketplaces. The insurer lost about $52.7 million in the first six months of this year, on top of a $77.5 million loss in 2014, according to regulatory filings. The move to wind down its operations was made jointly by officials from the federal Centers for Medicare & Medicaid Services; New York’s state insurance exchange, known as New York State of Health; and the New York State Department of Financial Services.” (The Wall Street Journal, 9.25.15)
  • Yes, The New York Obamacare Co-op Pissed Away $340 Million. “I posed a question for this answer to IB readers back a year ago. In fact, Mike and I both wrote posts about Health Republic dating back to January of 2013. So what’s happening now?… Having friends in high places has netted Horowitz and the Freelancers Union a nice chunk of change. Some may suggest that these co-ops were funded in the same scope as Solyndra. In this case it is not even close. This goes well beyond the scope of Solyndra. This didn’t hedge on success of a new technology or product. This allowed our federal government to give huge amounts of money that went directly to lining the pockets of those who aligned and aided a political interest.” (Insure Blog, 9.27.15)
  • Obamacare’s Failed New York Co-Op Drew Most Consumer Complaints. “Health Republic of New York, the largest Obamacare co-op in the country, was ranked as the worst health insurance company in complaints in 2014, according to the New York State Department of Financial Services. State regulators ordered Health Republic Friday to stop writing insurance policies as it was no longer qualified to provide health insurance policies under New York state standards…Under Obamacare, the Centers for Medicare and Medicaid Services gave $355 million in low-cost loans to Health Republic, which included an emergency solvency loan of $91 million in September 2014…New York liberal political activist Sara Horowitz founded Health Republic under Obamacare. She received a total of $517 million in federal loans to operate health co-ops in New York, New Jersey and Oregon.” (Daily Caller, 9.30.15)
  • How Overregulation Led to the Collapse of Obamacare’s Largest Co-Op. “A new report examining the collapse of Health Republic of New York, Obamacare’s largest co-op, said its failure—which may lead to a $265-million loss of taxpayer dollars—can be attributed in part to heightened regulatory control by the state. According to the analysis from the Albany, New York-based Empire Center, a ‘breakdown’ in oversight from the state Department of Financial Services and artificial cuts in Health Republic’s premiums may have led to the ultimate failure of the consumer operated and oriented plan, or co-op.” (Daily Signal, 12.22.15)
  • UnitedHealth Says N.Y. Obamacare Plans Could Be in Trouble. “UnitedHealth Group Inc., the largest U.S. health insurer, said its rates for Obamacare plans in New York may be too low because the failure of a competing insurer last year might lead to shortfalls in payments designed to stabilize Obamacare markets…UnitedHealth’s rates were set anticipating risk-sharing payments designed to stabilize the new insurance markets, William Golden, the company’s northeast region chief executive officer, said Wednesday at a state Senate round table in Albany. If the loss of a participant reduces the funds available to UnitedHealth, the company’s rates in New York’s Obamacare market may be insufficient, Golden said…The stabilization payments were thrown into doubt after regulators began shutting down Health Republic Insurance of New York in September because it was likely to become financially insolvent. With its failure, Health Republic won’t be able to pay into the risk-adjustment program, reducing the funds available to UnitedHealth and other plans in the state.” (Bloomberg Business, 1.6.16)
  • Number Losing Coverage.
    • When the original announcement was made 9.25.15, New York Times reported: “The Department of Financial Services said on Friday that current individual coverage should continue through Dec. 31 for 108,000 people, most of whom signed up through New York’s health exchange. The agency and the State Health Department said existing small group plans also remained in effect, covering an additional 101,500 people. Most of those policies were bought outside the exchange established under the federal Affordable Care Act.”
    • Consistent with the foregoing, Washington Examiner reported (10.30.15): “The co-op said it won’t offer plans in 2016, but more than 200,000 people would continue to have coverage until Dec. 31. Now those people have until Nov. 30 to find a new plan or risk losing coverage. The decision means that those who bought a Health Republic plan must choose a new plan for the remainder of 2015 on or before Nov. 15, the department said.”
    • The New York Times subsequently reported (11.3.15), “with more than 155,000 members, the New York insurer was the largest of the co-ops.”
    • The Daily Signal reported (12.22.15) that “Health Republic closed its doors Nov. 30, leaving some of its 215,000 customers to find coverage for a month—or go without—and secure new insurance for 2016 through the state-run exchange.”

Ohio (failed)

  • Federal Loans. Coordinated Health Mutual, Inc. (Formerly Coordinated Health Plans of Ohio, Inc.) d/b/a InHealth Mutual received $129,225,604 in federal start-up loans.
  • Enhanced Oversight. Ohio’s InHealth Mutual is now under “enhanced oversight” as of October, 2015, having reported a net loss of $9.1 million through the first six months of this year. It had capital on hand of $27.1 million — a decline from previous reporting periods. (ACA Signups, 10.23.15).
  • An Order of Liquidation was filed May 26, 2016. According to the Daily Signal, InHealth Mutual had enrolled nearly 22,000 consumers.

Oregon (2 CO-OPs, both failed)

  • Federal Loans. Freelancers CO-OP of Oregon d/b/a Health Republic Insurance of Oregon received $60,648,505 in federal start-up loans. Oregon’s Health CO-OP (Formerly Community Care of Oregon) received $56,656,900 in federal start-up loans.  Both plans operated statewide.
  • Number Losing Coverage. Nearly 15,000 people had to find new health insurance due to the Health Republic closure. (MedCityNews, 10.16.15). According to Bend Bulletin (7.8.16), the Health CO-OP closure affects roughly 20,600 policyholders who will need to enroll in new policies by July 31 to secure new coverage by Aug. 1.
  • Reason for Failure: Health Republic Insurance
    • The company made the decision after CMS decided that it would only pay 12.6 percent of what insures billed the government under the “risk corridors” program for 2014. This would cost the Oregon CO-OP more than $20 million (MedCityNews, 10.16.15).
    • According to the Portland Tribune (2.24.16), Health Republic Insurance Company of Oregon has filed a $5 billion class-action lawsuit against the federal government over the reduced risk corridor subsidies. The Daily Signal (3.16.16) reports that the suit was brought on behalf of insurers who failed to receive the full risk corridor amounts they’d requested.
  • Reason for Failure: Health CO-OP
    • According to Bend Bulletin (7.8.16), the Centers for Medicare and Medicaid Services announced in early July that the CO-OP owes about $900,000 to the federal risk adjustment program. The CO-OP lost $18.4 million in 2015, mostly in the individual market, according to DCBS. “The issue was the company badly misestimated the amount it would receive from the program,” DCBS Director Patrick Allen said.
      • Closure Process. State regulators will take over Oregon’s Health CO-OP’s assets in order to prioritize paying outstanding claims. Laura Cali, Oregon’s insurance commissioner, said she believes the CO-OP has enough money to pay its outstanding medical bills.

South Carolina (failed)

  • Federal Loans. Consumers’ Choice Health Insurance Company (CCHIC) received $87,578,208 in federal start-up loans.
  • 2015 Shutdown. The South Carolina Department of Insurance announced 10.22.15 that the CO-OP will not offer health coverage next year.  According to the announcement, Consumers’ Choice has agreed to a voluntary run-off and will not offer health insurance coverage in 2016. Any policies that became effective in 2015 will terminate at the end of this year.
  • Number Losing Coverage. As a result, approximately 67,000 individuals and small businesses will have to shop for new coverage for 2016 as they will not be able to keep their current coverage.
  • South Carolina’s Chief Regulator Suing Federal Government Over Collapse of Obamacare Co-op.  “The lawsuit specifically alleges the federal government owes the defunct co-op $36.9 million under the Affordable Care Act’s ‘reinsurance program,’ which was designed to stabilize premiums during Obamacare’s early years.” (Post and Courier, 4.15.17)

Tennessee (failed)

  • Federal Loans. Community Health Alliance Mutual Insurance Company received $73,306,700 in federal start-up loans.
  • Tennessee to Shut Down Obamacare Co-Op. “The decision comes a few weeks after the federal government warned Tennessee of financial problems with the co-op including failing to pay agents and brokers and rising patient complaints.” (Washington Examiner, 10.14.15)
  • Number Losing Coverage. “The insurer has 29,773 members and planned to increase its membership” (Washington Examiner, 10.14.15).

Utah (failed)

  • Federal Loans. Arches Mutual Insurance Company (Formerly Arches Community Healthcare) received $89,650,303 in federal start-up loans.
  • 2014 LossesThe company lost $19.9 million in its first year 
  • 2015 Receivership. Utah Insurance Department announced 10.27.15 that it will place Arches Health Plan in receivership. Receivership will allow the Insurance Commissioner to supervise the runoff of its existing policies. Utahns who have individual health policies through Arches should contact their insurance agent or visit during open enrollment, which begins on November 1. But existing policies run through the end of 2015 so long as premiums are paid.
  • Number Losing Coverage. The plan had 56,000 members as of August 2015.
  • Debts. The Utah Insurance Department is set to pay $10 million to healthcare providers over the next six months toward the debt of unpaid claims left behind by the defunct Arches Health Plan, according to the Deseret News, a small fraction of the $36 million they’re owed in the wake of Arches’ failure, the article noted. The CO-OP owes $90 million to the federal government and $2 million in unpaid debts to insurance agents and unpaid advertising costs.

Vermont (failed)

  • License Denied 2013. The Vermont Health CO-OP, which received $33.8 million in ACA funding was denied a license by the Vermont insurance commissioner on May 22, 2013 on grounds that it was “fatally flawed” and likely to be insolvent within 3 years given that its premiums would be 17 percent higher than the same policies offered by competitors. This was the first instance in which a state insurance department had opened up the books on an ACA co-op.
  • Federal Loan Retracted 2013. CMS retracted their loan in September 2013 – before the exchanges opened for the first open enrollment – because there were doubts that the program could be viable with Vermont’s impending switch to single-payer healthcare in 2017; ironically, Vermont pulled the plug on their single payer vision in late 2014. (, 10.16.15).
  • CO-OP Dissolved 2013. Vermont’s co-op dissolved in September 2013, returning its federal solvency loans, after state regulators denied it an insurance license, saying the company’s enrollment expectations were unrealistic and its proposed rates weren’t competitive. (Bloomberg News, 3.13.14)