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NM insurance co-op bucking national trend

ALBUQUERQUE, N.M. — More than half of the nonprofit health insurance co-ops formed through the Affordable Care Act are now off the market for the coming year, although the New Mexico co-op is bucking the trend and intends to continue to do so.

On Tuesday, two days after the start of the new enrollment season in insurance exchanges created under the health-care law, the website of Michigan’s Consumers Mutual Insurance posted notice that it will not sell coverage for 2016.

That co-op became the 12th plan to fail in the past year — and the ninth this fall — out of the 23 that opened at the start of 2014. The plans have offered an alternative, consumer-oriented type of coverage that the ACA envisioned as competition for traditional health insurers.

The dozen collapses will disrupt insurance for 740,000 individuals and small-business employees, who are being instructed by state and federal officials to choose new plans in time for them to take effect in January. In New York state, the window is narrower. Government officials have moved up the closing date of the New York Health Republic co-op, the nation’s largest, giving its more than 200,000 members just two weeks to select different coverage before it shuts down at the end of this month.

Although it lost money in 2014, New Mexico Health Connections is “financially very strong” with strong cash reserves, CEO Martin Hickey said Wednesday. In fact, the co-op expects to greatly expand by picking up consumers who had been insured with Blue Cross Blue Shield New Mexico on the state health exchange. Blue Cross is not offering individual insurance policies on the exchange for 2016.

“Our competitors don’t want to believe it necessarily, but we’re financially healthy,” Hickey said. “We’re going to be here for a very long time.”

In Colorado, Colorado HealthOP was decertified last month after federal authorities announced they wouldn’t be able to pay most of what they owed in the program designed to help health insurance co-ops get established.

Meanwhile, in Arizona, a co-op that just days ago was ordered to fold by regulators is resisting. The state’s insurance director, Andy Tobin, announced on Friday that he was placing Meritus Health Partners under state supervision and closing it down. His statement also said that the co-op “declined to consent” to that order.

The latest gyrations are occurring as the co-ops become new fodder for the partisan acrimony that has surrounded the 2010 law since its beginnings. At a hearing Tuesday afternoon of a House Ways and Means subcommittee, Republicans accused the Obama administration of wasting taxpayers’ money on an aspect of the law that they say is failing. Democrats countered that a series of GOP-forced budget cuts crippled many co-ops’ chances to thrive.