Kentucky nonprofit health insurer to shut down

Free Republic

Kentucky’s nonprofit health insurer set up under ObamaCare is shutting down because of financial problems, the latest in a string of closures for the nonprofit plans around the country.

Kentucky Health Cooperative, a nonprofit insurer known as a co-op, explained that it could not stay financially afloat after learning of a low payment from an ObamaCare program called “risk corridors.” That program was intended to protect insurers from heavy losses in the early years of the health law by taking money from better-performing insurers and giving it to worse-performing ones.

However, the Obama administration announced on Oct. 1 that the program would pay out far less than requested, because the payments coming in were not enough to match what insurers requested to be paid. Therefore, insurers only will receive 12.6 percent of the $2.87 billion they requested.

“It is with sadness that we announce this decision,” the insurer’s CEO, Glenn Jennings, said in a statement. “This very difficult choice was made after much deliberation. If there were a way to avoid it and simultaneously do right by the members, providers and all others that we serve, we would do so.”

The Department of Health and Human Services says that it recognizes that the low payments to insurers could have raised financial concerns for some insurers, and that as start-ups, not all co-ops would succeed.

The Obama administration said when making the risk corridor announcement earlier this month that the low payments could cause “isolated solvency and liquidity challenges” for a small number of insurers.

(Excerpt) Read more at thehill.com

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