ACA Government Co-Ops: Is This Experiment Working In Your State?

[Ann H]

December 2, 2015

Arizona's Meritus co-op tried to save itself by converting into a "For Profit" health insurer. The Federal Government today said, No Way!

Story: Feds Tell Obamacare Co-op No For-Profit, Will Shut Down | The Daily Caller

How would converting to a For-Profit entity help a Co-Op survive? Premiums are Premiums...Claims are Claims. For Profit corporations pay more in taxes too, don't they?

Isn't this paragraph telling? Yeah. Great idea. Start an insurance company and prohibit allowing experts from the insurance industry to run it.

Also reflecting the anti-business nature of the health law, federal regulators prohibit the hiring of any co-op board member if they had past experience with commercial insurance companies.

Read more: Feds Tell Obamacare Co-op No For-Profit, Will Shut Down | The Daily Caller​

 

[AllenChicago]

12.08.2015

Re: https://www.landoflincolnhealth.org/

The Land of Lincoln (LOL) Co-op in Illinois has just turned off the ability for Off-Exchange enrollment at their website. Off-exchange customers are supposed to be healthier than On-Exchange customers, aren't they?

Two weeks ago, they stopped Small Businesses from enrolling. Group health plans are usually composed of better health-risks than Individual plan purchasers, aren't they?

These Government Co-Ops sure know how to put the noose around their own necks don't they? Common insurance sense is totally foreign to the folks running them...into the ground.

 

[RayNY]

Common insurance sense is totally foreign to the folks running them...into the ground.

"No representative of any government or pre-existing issuer may
serve on the Board of Directors."

Combined with the fact that at least 50% of the board must be members, you wind up with a group of decision makers that don't know diddly about the industry.

Maybe the reason these things are dropping like flies is because the law requires it to be run by people who don't know what they're doing.

 

[Yagents]

Maybe the Blues are the next Co-ops?


Quote of the Day

"We continue to forecast that the 30 Not-for-Profit [NFP] Blue Cross plans, in aggregate, will lose money for full-year 2015 (i.e., net income including investment income), which would be the first full-year loss for the Blues since the industry down-cycle of the late 1980s. With the ACA exchange losses as a key driver, we estimate the NFP Blues aggregate after-tax income (including investment income) was $464 million for the first nine months of 2015, down more than 70% year-on-year from the same period in 2014, implying a margin of 0.4% versus year-ago 1.6% and as compared to 3.6% on average for the same periods of 2010-2013."

— Matthew Borsch, securities analyst for Goldman, Sachs and Co., said in a Dec. 3 update, based on 3rd quarter financials filed with the National Assn. of Insurance Commissioners.

Click here to read the HEALTH PLAN WEEK article in which this quote appeared — "ACA Markets May Not Be in Death Spiral, But Pain Is Being Felt Across the Industry" (Free for HPW subscribers; $17 for non-subscribers).

 

[jbage007]

Reproduction of a phone call I actually had with a rep and her supervisor at our local Co-op which is in receivership. I called to ask details on when the plan would expire by running the 90-day grace period (for on-x business). The policy had been last paid through the end of August and I was calling in late November trying to see when they actually would consider the plan in default and cancel it.

Q: So what is the grace period on this plan?
A: There is no grace period.

Q: What do you mean, there is no grace period?
A: Your premium is due on the due date.

Q: But what if you don't pay by the due date?
A: Then the policy might be cancelled.

Q: When? When would you cancel the policy?
A: Any time after 30 days.

Q: So you're saying there is a 30 day grace period?
A: No, there is not a grace period, but your plan could be cancelled at any time.

Q: Do you have a supervisor available?
A: Yes, one moment.

(remainder of conversation is with supervisor)

Q: I was told first there is no grace period, then I was told that the policy may be cancelled after 30 days of non-payment, which infers at least a 30 day grace period. I was under the impression that with a Marketplace plan there is a 90 day grace period.

A: That is correct.

Q: Ok, how does that work?
A: Your plan may be cancelled if payment is not received within 90 days.

Q: Ok so as of today, the policy is approximately 77 days past due. So how much do I have to pay to be sure that the grace period runs through the end of the year?
A: All of it.

Q: What do you mean by "all of it"?
A: You must pay the policy in full back to the last due date.

Q: What if I paid just one more month now?
A: Then the policy would be subject to termination at any time?

Q: But we just discussed ...
A: Sir, the policy does have a 90 day grace period but it may be cancelled at any time if full payment is not made.

Q: You mean from 90 days?
A: Yes.

Q: Well how do you count 90 days?
A: It would be from August 25.

Q: But the policy was paid for the entire month of August. Why would the grace period not start from September 1?
A. Because the payment was due on August 25.

Q: You are in receivership, which is basically the same as going through bankruptcy. Is that correct?
A: Yes sir.

Q: Gee, what a surprise.


UPDATE: No idea whether the policy has been terminated. The subsidies were stopped as of October. At no time has the Co-op sent any kind of letter indicating that the policy was at risk of lapsing. No such notice whatsoever.

 

[TN_agent]

All the failed ones have like 50 employees left trying pay out millions in claims on thousands of policies. You really think they are going to waste the time or postage at this point on past due notices? Once it is gone, there is no one to sue because you didn't get your required 30 days notice (or whatever).

I am surprised you could even get through to a live customer service rep without having to leave a message.

 

[AllenChicago]

I am surprised you could even get through to a live customer service rep without having to leave a message.

Me too! Our IL Co-op (LOL) is still open, but clients still can't reach anyone by phone, or get a call-back. Two clients last week said "Get me away from this thing. I'll pay more, just get me away from LOL!". The CEO threw in the towel yesterday.

 

[jbage007]

All the failed ones have like 50 employees left trying pay out millions in claims on thousands of policies. You really think they are going to waste the time or postage at this point on past due notices? Once it is gone, there is no one to sue because you didn't get your required 30 days notice (or whatever).

I am surprised you could even get through to a live customer service rep without having to leave a message.

One of the ill-effects of having a Co-op in receivership is that the courts remove the option to sue.

On the other side of the coin, because the Commissioner essentially runs the company, he/she has an obligation to ensure that nobody turns out the lights until all business is finalized, which will be months, if not years down the road.

 

[somarco]

all business is finalized, which will be months, if not years down the road.

WC is long tail business. Health insurance is short tail business. Most claims will be submitted and paid within 6 months of COB.

 

[jbage007]

Medical claims are not the only claims to be submitted.

There also are legal claims and creditor claims, lots of 'em.

It'll easily be two years before the doors are shut. The lawyers (hired by the Commissioner) will see to it that things drag out as long as possible.