Maine: CO-OP Subject of Regulatory Dispute Following 2015 Losses

Maine Community Health Options (CHO), the State's largest individual market insurer and the sole profitable CO-OP in the country in 2014, is the subject of a dispute between the Maine Bureau of Insurance and CMS over its solvency. As reported by Jennifer Haberkorn with POLITICO Pro, the Bureau's concerns date back to December 2015, when it froze CHO's enrollment in targeted individual plans. Since then, the Bureau of Insurance sought receivership of CHO with the intent to terminate a portion of its individual policies, citing the CO-OP's possibly insufficient capital. CMS has opposed these changes, noting the potential disruptions of coverage. The Superintendent of Maine's Bureau of Insurance notified CMS that the State does not have funds to cover additional losses and requested that CMS share in the financial responsibility should CHO become insolvent.

Oregon: State Considers Vendors to Develop New State-Based Marketplace

Oregon's Department of Consumer & Business Services is considering four IT vendors (hCentive, Vimo, Softheon, and New Fields Technologies) for the development of a second State-based Marketplace (SBM) platform. Oregon's first SBM, Cover Oregon, experienced technical challenges when launched in 2012, resulting in the oversight board abandoning the platform to utilize HealthCare.gov in March 2015. The State must now decide whether to continue using HealthCare.gov, where issuers will be charged a 1.5% user fee (which is expected to increase to 3% in the future) according to recently-finalized CMS guidance, or build an SBM. Should the Department of Consumer & Business Services award a contract, 2018 would be the earliest a new marketplace could be up and running.

GAO Reports on CO-OP Premiums, Enrollment and Oversight

A new report from the Government Accountability Office (GAO) reviews trends in CO-OPs' premiums and enrollment, as well as CMS oversight of CO-OP performance, and finds that between 2014 and 2015, premiums in CO-OPs tended to decrease while enrollment generally increased. In 2015, CO-OP enrollment more than doubled to 1 million people; however, more than half of those enrollees were in CO-OPs that have since ceased operations. The GAO also found that as CMS's oversight "evolved" to focus on performance and sustainability of CO-OPs, the agency developed an "escalation plan" framework to identify, assess and, if necessary, determine an enforcement action for financial or operational issue. As of November 2015, CMS used its escalation plan with 18 CO-OPs, nine of which have since ceased operations. CMS responded to the GAO, saying that the agency continues to monitor CO-OPs' enrollment and has increased data and financial reporting requirements. CMS also noted that its goal is to make it easier for CO-OPs to attract outside capital and enter into new business relationships and that the agency will work with states' insurance departments to monitor CO-OPs that have ceased operations in order to minimize the negative impact on members and possibly recover loans.