Best’s News & Research Service - January 20, 2016 01:59 PM (EST)
Judge Orders Kentucky Health CO-OP Into Liquidation After Rehabilitation Efforts Fail
FRANKFORT, Ky. //BestWire// - A Kentucky circuit court judge has ordered the state’s health co-operative insurance provider into liquidation after three months of rehabilitation efforts failed to turn around the ailing nonprofit company.
Kentucky Insurance Commissioner Brian Maynard called the move “regrettable” but said in a statement further efforts to bring the Kentucky Health Cooperative back “would increase the risk of loss, jeopardizing both creditors and policyholders.” The co-op announced in mid-October 2015 it was ceasing business at year end (Best’s News Service, Oct. 12, 2015).
The co-op was placed in rehabilitation Oct. 29, 2015, “and DOI began oversight of the day-to-day operations of the nonprofit health insurance company at that time,” the statement said.
Additional claims against the co-op will be accepted until mid-October of this year. Maynard’s statement said nearly all individual policies and most group plans were terminated on Jan. 1, and any others in-force will expire at the end of this month.
Only about two dozen individual policies and a handful of employer-based group plans still are in force, insurance department spokeswoman Ronda Sloan told Best’s News Service. She added most of the affected co-op policyholders eventually moved to exchange policies offered by Anthem and other insurers in the Bluegrass State.
That exchange, Kynect, is targeted for phase-out by newly elected Republican Gov. Matt Bevin in favor of putting Kentuckians onto the federally operated exchange (Best’s News Service, Jan. 12, 2016).
The Louisville-based co-operative reported losing $50.4 million in 2014 on net premiums of $171.6 million and total revenue of $238.9 million, according to BestLink. For the first six months of 2015, it lost another $3.9 million on net premiums of $103.4 million and total revenue just over $118 million, according to BestLink.
Enrollment totaled about 55,800 in mid-June, 2015, BestLink data showed.
More than half of the country’s original 23 Consumer Operated and Oriented Plans, established by the Affordable Care Act as cost-efficient alternatives to private health insurance, have failed.
(By Dennis Gorski, managing editor-online, BestWeek: Dennis.Gorski@ambest.com)