NASHCO Statement on HealthyCT

July 6, 2016


Connecticut CO-OP placed under an order of supervision by the Connecticut Insurance Department


WASHINGTON, DC – Yesterday, the Connecticut Insurance Department announced that it would place HealthyCT under an immediate order of supervision, prohibiting the health insurance CO-OP from writing new or renewing existing business. The announcement noted that “this risk adjustment mandate would put the company under significant financial strain.” The order also referenced challenges associated with the lack of full promised payments under the risk corridor program as a contributing factor in the decision.


Kelly Crowe, NASHCO CEO, made the following statement regarding HealthyCT:


“As the Connecticut Insurance Commissioner noted in her announcement, HealthyCT’s financial situation is tied to the failure of the risk adjustment program. Unfortunately HealthyCT is not a one-off example, but rather a symptom of much larger problems with a program whose sole function is market stabilization. Despite a preponderance of evidence advanced by NASHCO and CHOICES, as well as pleas from numerous state officials, meaningful reforms to the risk adjustment program do not appear immediately forthcoming.


“Choice and competition were promises made by the ACA. The landmark health law will fall far short of these goals if risk adjustment is allowed to continue in its current form. Case in point: Connecticut will only have two insurers left on the marketplace following HealthyCT’s exit.”


Last week, NASHCO released a statement after CMS announced risk adjustment transfers based on benefit year 2015, which is available here. CO-OPs owed nearly $150 million under the program, a much higher figure than even the year before. NASHCO and CHOICES, which is a coalition of small and fast-growing plans negatively affected by the risk adjustment program, have continued to raise questions on the program since problems became apparent last year.


The Connecticut Insurance Department is but one of several state insurance regulators that have expressed concerns with the risk adjustment program. Last week, the Illinois Department of Insurance issued an order preventing Land of Lincoln Health from paying $31.8 million into the program. New York state insurance regulators have also outlined issues with risk adjustment’s impact on small and new insurance companies. In June, Evergreen Health in Maryland filed suit in federal court alleging that risk adjustment is fundamentally flawed and detrimental to small insurers, such as CO-OPs. Maryland Insurance Commissioner Al Redmer, Jr. has long expressed concerns about the program, including in testimony before a February House Oversight and Government Reform Committee hearing.


Based in Washington, DC, the National Alliance of State Health CO-OPs is the trade association for non-profit health insurance CO-OPs. NASHCO was formed after the passage of the Affordable Care Act, and was designed to promote the development and success of health insurance CO-OPs. In the last five years, NASHCO has hosted multiple conferences to bring together those interested in the innovations and member governance models of CO-OPs, including health care policy experts, administration officials and congressional staff, health care industry professionals, and employer groups and consumer advocates. For more information, visit