Nonprofit health insurer CoOportunity Health, formed in 2013 under the Affordable Care Act and now in liquidation after running out of cash, may have been financially undone by its success in drawing clients, according to The New York Times. Based in Iowa and serving that state and Nebraska, CoOportunity enrolled more than 120,000 customers by the end of last year, far more than the 15,000 it had anticipated, resulting in much higher costs for claims.
CoOportunity was one of 23 nonprofit co-ops established to enhance competition in the online health-insurance exchanges set up by Obamacare. It received $145-million in federal start-up loans but faced more than $150-million in liabilities when it was taken over by Iowa officials in late December.
Nick Gerhart, the state's insurance commissioner, decided to liquidate CoOportunity last month after determining it could not be rescued. He said the organization had priced its plans too low to cover the greater-than-expected costs for medical care engendered by its popularity.