LEWISTON, Maine — Weeks after it started selling health insurance to individuals and small businesses, Maine Community Health Options wants to add large businesses to the mix.
The head of MCHO, a new Lewiston-based health insurance co-op, says it has applied to the Maine Bureau of Insurance for permission to insure groups of more than 50 people. MCHO is currently approved to sell only to individuals and small groups.
“We want to be able to service employers regardless of the rather arbitrary, 50-employee threshold,” CEO Kevin Lewis said. “An employer moves from 49 employees to 51, well, we still want to be able to provide good coverage options.”
He expects the bureau to make a decision in the coming days.
MCHO is a nonprofit governed by members. It is Maine’s first health-insurance co-op.
Co-ops were allowed for the first time under the Affordable Care Act, also known as Obamacare, in an effort to foster competition among health insurers, decrease rates and increase patient choice. The Centers for Medicare and Medicaid Services loaned co-ops billions of dollars to help get them off the ground.
Twenty-four co-ops were approved by the federal government, but at least one has since shut down and another is having problems. Officials are concerned about potential financial problems at others.
In a July report, the Office of Inspector General looked at 16 co-ops and said 11 had estimated their start-up costs would exceed the start-up money they got from the federal government.
Lewis said MCHO is not struggling like some.
“I can tell you that we’re in good shape to close out this year with all of our development needs properly financed and start 2014 in good shape,” Lewis said. “This has been part of our ongoing work this past couple of years to get to this point and we’re doing well.”
MCHO received a $62.1 million loan from the federal government, with $7.1 million earmarked for start-up, and $55 million for reserves and to show solvency for its state license. It has also received private loans and a $300,000 grant from the Maine Health Access Foundation.
That private financing has helped MCHO avoid at least one major co-op challenge: marketing. Federal rules prohibited the co-ops from using federal loan money to advertise their plans.
MCHO currently sells insurance policies to individuals and small groups both through the ACA marketplace and outside it. Customers can buy insurance through the marketplace or out of it, but they can only use federal subsidies or tax breaks for plans bought through the marketplace.
Since Oct. 1, Lewis said, MCHO’s website has gotten more than 17,000 unique hits and its call center has taken more than 830 calls from people curious about coverage. Many of those callers have asked about MCHO’s provider network, enrollment through the marketplace website, tax credits and plan rates, benefits and out-of-pocket expenses.
Lewis declined to say how many people have enrolled in MCHO insurance plans. He said enrollment had been “a small fraction of overall demand,” in large part because problems with the federal marketplace’s website have meant many people can’t sign up that way.
Lewis believes enrollment will increase in November and early December, when the marketplace website improves and when the deadline to buy insurance gets closer.
He expects adding large businesses will boost enrollment, too.
“We’ve had this in mind because we didn’t want to have a hard stop at this arbitrary cutoff of 50 employees,” he said. “We want to provide coverage to as many Mainers as possible, people who have been on the sidelines. So we’re continuing our focus in reaching people who have been without coverage or who have had coverage they aren’t satisfied with.”