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

[bobson]

Montana's should be profitable if it can only enroll a few more people to make up some volume.

The Montana Health Cooperative took in $38.4 million in premiums and paid $54 million in claims in 2014.

 

[somarco]

received around $70m in funding from the feds...

That would be great if the feds had any of their own money.

But they don't.

Blue Cross and Blue Shield of Montana is asking regulators to approve an average increase of about 22 percent over the rates approved in 2015 for its individual plans. PacificSource is asking for an average 32 percent increase. The Montana Health Cooperative is requesting an average 34 percent increase.

Montana health insurers ask for double-digit rate hikes - KULR-8 Television, Billings, MT

only one Co-op, Maine Community Health Options, reported both favorable underwriting and net income at $10.9 million. All other Co-ops reported both underwriting and net losses.

Net losses through Sept. 30, 2014 ranged from $2.6 million for Montana Health Cooperative to a loss of $39.8 million at CoOportunity Health. The aggregated underwriting loss was $243.6 million at Sept. 30, compared with $72.3 million for the first quarter of 2014.

http://www3.ambest.com/ambv/bestnews/PressContent.aspx?altsrc=14&refnum=22103

 

[sman]

Thank-you for the link to that article, SCAgent. I was investigating who covers the existing, outstanding medical bills when an ObamaScare Co-Op goes belly up. The answer...NO ONE! Holy crap.

Makes you feel all warm and fuzzy inside, doesn't it?

 

[AllenChicago]

Makes you feel all warm and fuzzy inside, doesn't it?

Well SMAN, it puts me into new mental territory when it comes to client relations. Before this year, I've never had to tell clients and prospects that the lower priced health insurance option is a time-bomb that might leave them with a chitload of medical bills to pay.

Our state co-op is +20% less than the second lowest priced carrier (BCBS) and actually has a wider PPO network. You tell people, but with health insurance being so expensive, 3 out of 10 take their chances and choose the Land of Lincoln Co-op plan(s) anyway.

If 2016 brings the same pricing/network advantages to LOLH, I'm going to have clients sign a statement that they chose this company against my advice. When the Co-op goes under, and they're stuck with medical bills, clients will reach out to blame, sue, etc. the only contact they had in the decision process... me.

But then again, if I steer them away from the Co-Op and HHS/CMS gets wind of this, my goose is cooked to toast.

 

[scagnt83]

If 2016 brings the same pricing/network advantages to LOLH, I'm going to have clients sign a statement that they chose this company against my advice. When the Co-op goes under, and they're stuck with medical bills, clients will reach out to blame, sue, etc. the only contact they had in the decision process... me.

But then again, if I steer them away from the Co-Op and HHS/CMS gets wind of this, my goose is cooked to toast.

I would just tell them how it is not covered by the SGA. Then have them sign a document stating that you informed them of this.

Also, if the carrier is not rated, 99% of E&O policies will not cover the sale. So is that really a chance you want to take???

Personally, I would just choose not to write Co-Op policies. When customers ask why, tell them its because of 2 reasons: 1. Not covered by my liability insurance because of their lack of financial ratings. So my insurance sees them as a much higher risk vs. the others with better financial positions. 2. Not covered by SGA, so no safety net for my consumer if the company goes under.

But think about what will happen if the Co-Op in your state goes under...
Suddenly you will see commercials on tv from lawyers asking "were you informed that you Co-Op insurance was not covered by State Guaranty Funds? If not, you might be entitled to compensation. Call us now!".

And I would bet that somewhere in that insurance contract it has a disclaimer that it is not covered.... so that will leave the agent holding the bag when the hammer drops... with no E&O coverage...

Seems like extremely dangerous business to be out there placing imo. I wont even sell a Fraternal for this very reason.

 

[Yagents]

Wasn't the Co-Op in Iowa that went bust covered by the SGA? Co-opportunity Health?

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This sheds more light:

What happens if health insurers fail? | LifeHealthPro

 

[FLM2]

Well SMAN, it puts me into new mental territory when it comes to client relations. Before this year, I've never had to tell clients and prospects that the lower priced health insurance option is a time-bomb that might leave them with a chitload of medical bills to pay.

Our state co-op is +20% less than the second lowest priced carrier (BCBS) and actually has a wider PPO network. You tell people, but with health insurance being so expensive, 3 out of 10 take their chances and choose the Land of Lincoln Co-op plan(s) anyway.

If 2016 brings the same pricing/network advantages to LOLH, I'm going to have clients sign a statement that they chose this company against my advice. When the Co-op goes under, and they're stuck with medical bills, clients will reach out to blame, sue, etc. the only contact they had in the decision process... me.

But then again, if I steer them away from the Co-Op and HHS/CMS gets wind of this, my goose is cooked to toast.

Allen, all you will get by asking people to sign something like that is lost business, all because you are trying to help.

Just put a disclaimer at the bottom of an email to each client that references any risk of claims not being paid-wouldn't the State Insurance Fund take over claims responsibility if an insurance coop goes under though?

 

[scagnt83]

Wasn't the Co-Op in Iowa that went bust covered by the SGA? Co-opportunity Health?

----------

This sheds more light:

What happens if health insurers fail? | LifeHealthPro

So according to that article it just depends. And most states do not have a list of carriers covered by the SGA. I guess you might be able to call and ask.

 

[somarco]

From the link Tyler provided above .......

In a MEWA, a group of employers pool contributions in a self-funded health plan for employees and bear the claims liabilities, according to the department. The SCHC is the only MEWA licensed in the state.

Haven't seen a fully insured MEWA in years. This one is self funded. Only fully insured plans are covered by the guaranty fund.

 

[Post Quartermaster]

But think about what will happen if the Co-Op in your state goes under...
Suddenly you will see commercials on tv from lawyers asking "were you informed that you Co-Op insurance was not covered by State Guaranty Funds? If not, you might be entitled to compensation. Call us now!".

LOL.......better chance of the lawyers chasing CMS/HHS for allowing a deficient carrier onto the marketplace.........