Community Health Options sues feds for $23M
FILE PHOTO / TIM GREENWAY
Kevin Lewis, CEO of Community Health Options, left, and Robert Hillman, COO, in the nonprofit health insurer's headquarters within Lewiston's historic Bates Mill complex.
Maine health insurance co-op Community Health Options of Lewiston is suing the federal government over $22.9 million it claims it is owed to offset losses it incurred in 2015, according to the Portland Press Herald.
Community Health Options was the only consumer operated and oriented plan created under the Affordable Care Act to make money in its first year of operations in 2014, according to the newspaper, but it reported a $31 million loss in 2015. With guidance from the Maine Bureau of Insurance, it set aside $43 million in reserves for possible losses in 2016.
Community Health Options is alleging in its suit that the federal government owes it the money under a temporary program called “risk corridors,” which aims to manage costs and profits for the first few years of the ACA.
Community Health Options paid $2 million into that program in 2014 but got nothing back for its costs in 2015, CEO Kevin Lewis told the Lewiston Sun Journal.
“We at Health Options have followed the law and helped expand the Maine and New Hampshire markets and make them leaders in terms of individual coverage through the marketplace,” Lewis told the Sun Journal. “It’s important for the government to make good on its payment obligations.”
Of the 23 co-ops created under the ACA, only 11 were still operational at the beginning of this year. By mid-July, four additional co-ops had failed — in Ohio, Connecticut, Oregon and Illinois — leaving Community Health Options one of only seven remaining, according to the independent consumer health insurance guide healthinsurance.org.
In May, in an effort to help the remaining co-ops become financially viable, the U.S. Department of Health and Human Services issued immediate changes in its regulations to make it easier for co-ops to seek outside investments and to expand their plan offerings beyond the individual and small group markets.
For 2017, in rate proposals under review by the Maine Bureau of Insurance, Community Health Options has proposed an average rate increase of 22.8% in Maine, where most of its insured members live.
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