NASHCO Statement on Recent CO-OP Closures

October 16, 2015


WASHINGTON, DC – Kelly Crowe, CEO of the National Alliance of State Health CO-OPs (NASHCO), made the following statement after recent news that Community Health Alliance in Tennesee, Colorado HealthOp, and Health Republic Insurance of Oregon will begin winding down operations and cease to offer plans after 2015:


“The dissolution of three CO-OPs this week is a devastating blow to Americans who seek competition, choice, innovative benefits, and non-profit alternatives when selecting a health insurer. It is no coincidence these announcements come on the heels of the recent notice by CMS that only 12.6% of the 2014 risk corridor will be paid to insurers. Many of the CO-OPs now closing were well on their way to longer term financial sustainability, but few businesses can sustain hits like the CO-OPs and other small and new insurance companies have endured from unexpected risk adjustment obligations and much lower-than-promised risk corridor payments.


“With HHS already issuing lower ACA enrollment projections and health insurance giants merging to further limit competition, the presence of CO-OPs is needed now more than ever. Though federal regulators have taken some modest steps to ease CO-OPs’ short term financial burdens, a firmer commitment to fulfill the obligations of the ACA’s risk programs is needed to provide stability to the marketplaces.


“This week’s news should not be viewed as start-up failures, but rather closures due to unfulfilled promises. Indeed, under the right conditions, CO-OPs have proved their models can be successful in providing quality health insurance to Americans who need it most; a mission NASHCO’s members look forward to meeting in 2016 and beyond.”