As predicted by Insurance Business earlier this week, the failure rate of Obamacare health insurance co-ops continues at a rate of one per week. The latest victim is Consumers’ Choice Health Insurance Company of South Carolina, which announced Thursday it would be winding down at year-end.
The news brings the failure rate to nine out of the 23 still operating a year ago. But yet more are expected, perhaps as early as next week, following the revelation of a 'secret' list of 11 (now ten) Obamacare health insurance co-ops on the verge of failure.
Jerry Burgess, president and CEO of Consumers’ Choice, gave a now all too familiar explanation for the closure: “The recent announcement of a risk corridor reimbursement of just 12.6% cast doubt on the collectability of tens of millions of dollars through the federal risk corridor program and led to an unavoidable outcome,” he said.
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.
Almost one third of the non-profit health insurance plans created under President Obama's Affordable Care Act (ACA) will be shuttered by year-end and it is now thought that nearly half a million customers of failed and failing co-ops will have to find new coverage in 2016, and that number is expected to grow before the year is out.
News reports this week quoted a spokesman from the federal Centers for Medicare and Medicaid, which manages the Obamacare program, as saying that a further 11 (now ten) as yet unidentified co-ops are now on “a corrective action plan” or “enhanced oversight”, with the CMS demanding they take urgent action or face closure. The CMS does not plan to release names of those businesses affected.
The ACA’s third open-enrollment season begins November 1.
