Another Obamacare co-op is cratering.
Community Health Options, the Lewiston, Maine-based health co-op hailed by the New York Times and NPR as an Affordable Care Act success, is discontinuing individual enrollment effective next Monday. Current policy holders will remain insured — at least for now.
CHO made the decision after reporting third quarter losses of $18 million. Of course, by the standards of other co-ops being only $18 million in the red is impressive. New York just forced co-op Health Republic to close shop after it lost $130 million.
The only one of 23 co-ops to make a profit last year, CHO started to bleed money in 2015 because enrollees sought more medical care than expected.
“The claims coming in are higher than what we anticipated, higher on a per-member per-month basis than last year,” said CHO CEO Kevin Lewis told the Bangor Daily News. “It”s hard to tell whether this is a new normal of whether this is a new normal of whether this is a kind of peak that will be followed by a lessening of claims and utilization.”
If past is prologue the losses are likely to increase. Already 12 of the 23 co-ops have closed after losing $1.3 billion, slightly more than half of their original congressional appropriation.
The worst may be yet to come.
Noted Affordable Care Act critic Betsy McCaughey told this column that, “the Maine co-op’s failure this week and CIGNA’s warning that it may not stay in Obamacare after 2016 are the latest signs of Obamacare’s death spiral. Young healthy people are not signing up. Only a crony capitalism bailout — now being pushed by the White House and Democrats — can save the exchange.”