State’s insurance co-op will cease operations on January 1, 2016
Nevada’s health insurance co-op will be closing down on January 1 next year. The co-op was established through the Affordable Care Act and serves as a non-profit insurance organization that is meant to provide consumers with more options when it comes to affordable coverage. The problem, however, is that the co-op has struggled to meet its enrollment goals and has failed to generate profits, which has lead to a troubling financial situation that it is not able to recover from.
Insurer has struggled to repay $66 million in federal startup loans
The co-op was provided with $66 million in startup loans, which it was meant to repay but was never able to. As a result, the co-op will no longer be offering health insurance coverage at the beginning of next year. Pam Egan, CEO of the co-op, noted that high claims costs and very limited growth are the reasons for the co-ops financial problems. These problems would make it difficult for the insurer to provide quality products at affordable rates.
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Consumers may have to seek out coverage through the state’s insurance exchange
Those with coverage from the co-op will have their policies remain in effect through December 31 of this year. After that, consumers may have to find coverage from other sources, such as the state’s health insurance exchange or directly from insurers themselves. The state’s insurance exchange has found significant success and has proven quite capable of providing consumers with inexpensive, yet comprehensive health insurance coverage.
Co-ops throughout the country continue to struggle
Co-ops in other states are also struggling to generate profit, with some also facing collapse at the beginning of next year. These exchanges have fought to repay their debts to the federal government but have, in most cases, failed produce enough profit to do so while still providing adequate services to consumers. The co-ops may become one of the greatest failings of the Affordable Care Act, as their financial problems will be shifted to taxpayers as the federal government works to recover its loans.