So far, health insurance co-ops created in response to the Patient Protection and Affordable Care Act have produced mixed results.
While some have proved wildly successful, most have failed to hit their enrollment goals. The latter scenario played out disastrously in Nevada, where Nevada Health CO-OP, the only state-based insurer participating in the Silver State's PPACA insurance exchange, announced it would soon close shop due to insolvency.
Co-op CEO Pam Egan told the Las Vegas Review Journal that the problem was pretty simple. Claims were high and enrollment was low. The co-op reported losses of nearly $20 million for 2014, its first full year of operation. It reported another $22 million of losses in the first six months of 2015.
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The failure would have been unexpected in the first month's of the co-op's creation, when it was actually beating its conventional competitors, including UnitedHealth and Anthem Blue Cross Blue Shield, in enrollment. For some reason, however, enrollment tapered off in 2014 and the for-profit giants quickly overtook the nonprofit newcomer.
The co-op nevertheless is promising to provide coverage to its current members through the end of 2015, at which point enrollees will have to join other plans. The insurer still has $65.9 million in outstanding debt to the federal government from the loans it received to set up the novel insurance system. Nationally, the federal government has provided roughly $2.3 billion in loans to co-ops operating on a number of state exchanges.
A recent success story for insurance co-ops comes out of Arizona, where a state-based nonprofit that struggled to attract members last year reported a dramatic boost in enrollment in recent months. Co-op leaders attributed the rise in popularity at least partially to its decision to lower premiums.
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