Just a few days after it looked like Colorado Health Op was in the clear and moving ahead with a bright future news broke that stated the opposite. The problem with this potential closing isn’t due to the cooperative being managed wrong. This is due entirely to the Affordable Care Act (ACA) not upholding their end of the law. When the healthcare cooperatives were created there were three plans that gave the cooperative money to help them on their feet and make their way into a very competitive healthcare market.
One of those plans is called the “risk corridor” and is written into the Affordable Care act stating that it will give insurance companies 100% of the money they request to cover the risk of the insured individuals and families they are taking on. Due to the fact that policies are guaranteed issue, each healthcare company runs the risk of insuring both the sick and healthy. The risk comes from not knowing what those preexisting conditions might be and potentially taking on some very sick individuals and ensuring their medical claims are paid. The Department of Insurance (DOI) requires that each healthcare company have a certain amount of risk capital in reserves each year.
Colorado Health Op, as a new company relied on the ACA to uphold the law and cover 100% of the risk corridor funds requested. Unfortunately the government has now informed Colorado Health Op that due to a shortage of funds in that account they will only be covering 12.6% of the funds requested. This puts this cooperative along with all of the others and any other new and smaller healthcare companies in jeopardy. Of course there are still several other healthcare providers to obtain health plans from, choice is not the issue. The issue at hand is the cost of premiums. Without the new companies to drive a competitive market other health carriers have no reason to keep their premium prices low.
It would be nice to see at least one health cooperative keep their doors open, but the very government that saw to the cooperatives opening their doors and using tax payer money to do so, is now making it impossible for them to keep their doors open. What do you think about the decision of the Centers for Medicare and Medicaid Services only providing 12.6 of the 100% of funds promised to insurance companies?
Read the full article from the Denver Post HERE