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Oregon's second health insurance co-op to be liquidated

Category: Insurance Published: Saturday, 09 July 2016 Written by Chance Allen

The shakeout continues in Oregons health insurance market.

State regulators will take the first steps Monday to take the Oregons Health Co-op into receivership. The companys board of directors voted Friday to consent to the receivership order, paving the way for the state to liquidate the troubled companys assets.

Oregons Health Co-opis a nonprofit consumer operated and oriented health insurer formed under the Affordable Care Act. Its tiny by industry standards, with just 20,600 policyholders in Oregon.

It is with great sadness that I announce Oregons Health CO-OP is shutting down its doors immediately, said Phil Jackson, the co-ops top executive. The board of directors agreed that it is in the best interests of our members and community that we wind down our operations.

It is the third Oregon insurance company driven into financial crisis after federal financial assistance failed to appear. The insurer was expecting to receive about $5 million from the Centers for Medicare and Medicaid Services as part of the federal governments risk adjustment program. Instead, the feds informed Oregons Health Co-op that it owed $900,000 to the agency.

On top of the $18.4 million the company lost last year, it was a hit it couldnt afford to take, state regulators decided. It presented not just a hit to capital and surplus but a cash flow problem, said Laura Cali, Oregon insurance commissioner.

Oregon took Moda Health Plans into supervision in January due to that companys deteriorating financial condition. A chief cause of Modas issues was tens of millions of dollars in Affordable Care Act-related financial assistance that never appeared. Likewise, Heath Republic, another of the new insurance co-ops, failed last year, in part due to the lack of anticipated federal dollars.

Both Moda and Health Republic have sued the federal government.

Allen said Oregons Health Co-ops 12,000 customers in the individual market need to take quick action to select a new health insurer. The co-ops coverage will end July 31. Customers can select a new carrier at HealthCare.gov or enroll directly through an insurance company or broker.

Moda managed to restore its depleted capital by selling off assets and the state has rescinded its supervision order.

-- Jeff Manning

503-294-7606, This email address is being protected from spambots. You need JavaScript enabled to view it.



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