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Fallout from CoOportunity Health liquidation felt locally PDF Print E-mail

By Russ Pankonin
The Imperial Republican

Several local businesses have experienced the fallout after the health insurance company, CoOportunity Health, went into forced liquidation.
CoOportunity Health, an Iowa-based health insurance cooperative, was formed with $146 million in federal grants and loans under the Affordable Care Act.
It was one of 23 such health insurance cooperatives nationally and covered a total of nearly 120,000 people in Iowa and Nebraska. The plan covered more than 80,000 people in Nebraska.
Iowa Insurance Commissioner Nick Gerhart took over CoOportunity Health in late December. He said he chose liquidation after determining the cooperative’s medical claims would exceed its cash on hand.
Gerhart said CoOportunity hit a cash flow crunch after a provision adopted by Congress reduced its assets.
He said special insurance-guarantee funds in Nebraska and Iowa will pay outstanding claims. He recommended people find other health insurance coverage as soon as possible.
Local businesses affected
For the Imperial Manor and Parkview/Heights, the cooperative’s failure created a scramble to find new coverage for its employees.
The city began working with an insurance broker who was able to find comparable coverage for Manor employees, according to City Clerk/Administrator Jo Leyland.
She said the overall cost was slightly more expensive than the CoOportunity coverage. The Manor and Parkview/Heights share the cost of health insurance with the employee, with the city paying 55 percent of the cost.
Employees began signing up last week for the new coverage.
ALLO Communications, based in Imperial, switched their insurance to CoOportunity Health in October 2014.
After the Iowa insurance commission took over the company, ALLO began hunting for alternatives almost immediately, their human resources coordinator Lesley Nordhausen said.
She said they put out a request for proposals to a number of companies and were able to find a comparable plan cost-wise.
By Feb. 1, they had switched to a new plan.
Consultant perspective
Local insurance broker and health care consultant Lynette Meeske, owner of Trustpoint Insurance, has seen the fallout first-hand.
She said she had a lot of clients who had switched their coverage to CoOportunity because their plan offered better benefits at a lower cost.
CoOportunity’s failure “has affected a lot of people,” she noted.
Individuals with CoOportunity plans can continue to use the policy through Aug. 31 but all coverage ends after that date.
No premium tax credits are applied on those plans after March 1 so the individual must pay for the entire premium.
Benefits are paid by the Nebraska Life and Health Insurance Guaranty Association, which steps in after an insurance company fails.
Meeske said people need to be aware that the guaranty association benefits are limited to $500,000 per person.
People with individual policies can enroll for other coverage through the Affordable Care Marketplace through April 29, she said.
While people can stay with a CoOportunity plan through Aug. 31, they will be uninsured after that date. As a result, she recommended people find new coverage before the open enrollment period ends April 29.
She said it’s been frustrating for clients who are now finding themselves paying a higher premium for less coverage.
Payments starting to come
Chase County Community Hospital Administrator Steve Lewis said the hospital has been affected by the cooperative’s failure, as well.
He said they have been notified they will be paid by the state’s guaranty association, with the first checks expected in the next several weeks.
He said they are compiling a record of bills that would have been paid by CoOportunity for submission to the guaranty association.


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