Another co-op insurer is showing signs of struggle, if not financial collapse, as a state regulator steps in.
Community Health Alliance, a federally-backed consumer-oriented and -operated plan in Tennessee, is freezing its enrollment on and off the public exchange, after meeting its sales goals.
CHA pulled its health plans off Tennessee's federally-facilitated exchange on January 15, with approval from the state insurance commissioner. Tennesseans who enrolled in the insurer's individual and group plans will continue to stay in them, and their benefits and provider networks will not change.
CHA is not in "some type of trouble in its operations," the organization told members in an FAQ. "Be assured you are enrolled in a health plan that is managing growth the way any prudent organization would."
Julie Mix McPeak, Tennessee Department of Commerce and Insurance Commissioner, said the enrollment suspension is a "preventative measure to support the long-term viability of CHA and the protection of Tennessee consumers" and that the insurer is on track to sell again in the ACA's third open enrollment, for the 2016 plan year.
In early January, CHA told state regulators that their enrollment had "grown exponentially from 2014 to 2015 and had significantly outpaced expectations," Mix McPeak said. "At the request of CHA," the commerce and insurance department sought and received federal approval for the suspension, she added.
"Freezing enrollment in CHA was a decision we made after lengthy discussions with CHA leadership, the Department of Health and Human Services and an analysis of CHA's financial conditions and projections," said Mix McPeak. "This course of action is the best one for CHA and for Tennessee consumers."
CHA's departure from the exchange leaves behind a still fairly competitive market for the last month of enrollment, with four carriers in at least some parts of the state -- BlueCross BlueShield of Tennessee, which garnered more than 80 percent of the exchange market in 2014, Assurant Health, Cigna and Humana.
The co-op was founded in 2012 by a group of Tennessee healthcare advocacy groups and employers. Based in Knoxville, CHA is led by CEO Jerry Burgess, who previously worked as a hospital system administrator at St. Mary's Health System in Knoxville and Methodist Health Systems in Memphis.
In the first open enrollment, CHA started small, selling in five of the state's eight rating areas and ending up with enrollment of less than 1,000, well below its goal of 25,000.
For 2015, the insurer expanded to all rating areas counties and offered the lowest premiums in many areas -- as the state's largest insurer, BlueCross, increased exchange premiums on average by 19 percent.
It's not clear how many exchange consumers CHA enrolled through January 15, but with the lowest premiums in most of the state, the co-op likely attracted both new exchange consumers and those who enrolled last year in another plan whose premiums were now set to increase.
In the wake of another co-op's probable demise -- CoOportunity Health in Iowa and Nebraska -- the decision by CHA to freeze enrollment (the first-ever such move in an exchange) raises questions about how the other 21 cooperative plans will fare if they garner high enrollment.
On that front, only time will tell, as new members start using their plans, cooperatives start paying claims and federal regulators divvy up the risk adjustment funds meant to stabilize the risk pools of startup and giant insurers alike.
Photo: "Knoxville-R" by Zereshk. Licensed under CC BY 2.5 via Wikimedia Commons.
