Nonprofit health insurers established in Colorado and Oregon under an Affordable Care Act initiative said Friday they are shutting down, becoming the latest of 23 state-level insurance "co-ops" to fall victim to cash shortages, The Denver Post and The Oregonian report.
Colorado insurance regulators effectively put Colorado HealthOP out of business, barring the organization from selling policies on the state exchange because it no longer met capital-reserve requirements. Oregon's Health Republic Insurance announced it will stop selling new plans next year and will wind down after paying off members' 2015 claims.
The moves were precipitated by the federal government's recent announcement that it will pay only about one-eighth of an expected subsidy to the consumer-owned and consumer-operated insurers to help them take on the sickest, most expensive patients. Launched two years ago with hundreds of millions of dollars in federal loans, the co-ops have run chronic losses and have foundered at an increasing clip in recent weeks amid doubts about their ability to meet obligations to clients.