Evergreen Health, the Maryland-based nonprofit insurer created in the wake of the Affordable Care Act, is changing to for-profit company status in a desperate move to save itself from an impending shutdown scenario.
If Evergreen’s move is approved by state and federal authorities, it will mean that only five of the 23 co-ops would remain of those started just three years ago. Seventeen of the state’s co-ops either collapsed or were closed by regulators due to pending insolvency, the Washington Post reports. The move would leave thousands of Maryland citizens without health insurance.
The nonprofit faced serious financial stress when the federal government earlier this year announced a risk adjustment program that could require Evergreen (and other smaller insurers) to make huge payouts to larger insurance companies, the Baltimore Sun reports. The program essentially requires smaller insurers to payout large sums of their revenue to a few of the biggest insurers in the business.
Evergreen spent the past year trying to strike a deal with the federal government in order to calm some of the nonprofit’s financial worries. Teaming up with the state lawmakers, Evergreen filed suit in early June against the federal government.
The Maryland insurer expects to owe as much as $24 million, around 30 percent of the its revenue in premiums, in risk-adjusted payments, according to the Baltimore Sun. The Maryland nonprofit warned regulators that if it were required to pay the total sum, it would put its future financial stability in jeopardy.
The governing board of Evergreen Health announced Monday that it will take over the co-op from the federal government, and turn it into a for-profit enterprise, according to the Post.
The Center for Medicare and Medicaid Services announced in October, 2015, changes to the risk adjustment program, but they will come into effect too late to save either Evergreen or the already failed Maryland co-ops.
Evergreen has not reached a settlement with the federal government as to the amount of risk adjustment fees it will pay this year.
It might be hard to imagine a situation in which Obamacare could get any worse: 16 healthcare co-ops have gone under, the Tennessee Health Commissioner is saying the state’s Obamacare exchanges are “very near collapse,” and analysts can’t even fathom a positive future for the system in either the short or long term. (RELATED: Obamacare Imploding, Clinton Pushes For Complete Gov’t Take Over Of Health Care)
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