Colorado’s nonprofit health cooperative says its future has been jeopardized by an unexpectedly low payment from a federal program intended to help more people acquire health insurance.
The federal Centers for Medicare and Medicaid Services informed health cooperatives nationwide Thursday that a “risk corridor” plan, one of three programs meant to help insurance companies widen their coverage nets, was short of money.
Way short: For now, insurers that took on big risks by enrolling sickly, previously uninsured people will get just 12.6 percent of the money they requested.
The Affordable Care Act’s risk-corridor program is supposed to offset losses incurred by new insurance providers with payments from more profitable companies. But in the first year, requests for payments dwarfed deposits into the program.
Julia Hutchins, CEO of Colorado HealthOP, responded by promising to fight on behalf of its 80,000 members.
“The federal government,” she said, “has reneged on its obligations to pay Colorado HealthOP more than $10 million,” jeopardizing its capital reserves.
At worst, the cooperative could go out of business, she said. “It’s serious. Our fate is not certain, but we’re certainly at risk.”
The program payments due under federal law will be spread out over three years. But, given this year’s shortage, “the accountants have a hard time believing the government will do better next year,” Hutchins said.
Kelly Crowe, CEO of the National Alliance of State Health CO-OPs, said the lower-than-expected payments “appear to be hindering the viability of new entrants to the marketplace.”
But Crowe said she believes the government “is committed to fully funding the risk-corridor program over its life” and to helping stabilize the cooperatives.
Earlier this week, U.S. Sen. Cory Gardner, a Colorado Republican, asked Health and Human Services Secretary Sylvia Burwell to investigate the financial viability of Colorado HealthOP. He cited previous failures of new health co-ops in Nevada, Louisiana, Iowa and Nebraska.
“In light of this recent announcement,” Gardner said Friday, “I’m calling on Secretary Burwell to answer those questions as quickly as possible and provide Coloradans with the answers they deserve.”
David Olinger: 303-954-1498, dolinger@denverpost.com or @dolingerdp
