In news that cannot be considered surprising, Ohio’s health care co-op, InHealth Mutual, becomes the unlucky 13th out of the original 23 co-ops to close. Over 20,000 consumers must find new health care coverage within 60 days of May 26, 2016, the date of the announcement. The Ohio Department of Insurance (ODI) and the co-op have entered into an agreed order of liquidation.
The liquidation agreement establishes requirements for both policy holders, providers, and vendors as the company begins the process of ceasing operations. State Lt. Gov. Mary Taylor, the Ohio Director of Insurance, has been appointed receiver, and ODI will continue to operate the company, pay claims, control cash reserves, and work with vendors. Taylor stated that the company’s losses were too great to continue operations and pay future claims.
Nonprofit co-ops, created by section 1332 the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) in order to foster competition on the market, have largely failed in their mission. According to a March 2016 Senate report, these failures could cost up to $1.2 billion in government funding. The closures have caused almost 750,000 individuals to quickly search for alternative coverage.