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October 13, 2015

Nonprofit Kentucky Insurer Is Latest Co-op Casualty

The Kentucky Health Cooperative will stop offering insurance plans at the end of the year, becoming the fifth of 23 nonprofit providers set up with federal aid under the Affordable Care Act to shut down, The Courier-Journal in Louisville and Becker's Hospital Review report. The move affects some 51,000 Kentuckians who must find new providers in the next open-enrollment period for government-run health-care exchanges, which begins Nov. 1.

The Kentucky co-op relied largely on "risk corridor" payments from the U.S. Centers for Medicare and Medicaid Services that help start-up providers taking on newly insured, costlier patients. The federal agency said earlier this month that those payments would total $362 million for 2014, about one-eighth of what insurers requested.

The Kentucky Health Cooperative and other co-ops were authorized by the health-care reform law and backed with federal loans in an effort to give consumers more coverage choices in states with limited options. They have struggled with red ink https://philanthropy.com/article/Government-Audit-Finds-Big/232017 and four have already closed https://philanthropy.com/article/Regulators-Shuttering/233433, including the largest, Health Republic Insurance of New York.