LEWISTON, Maine — Community Health Options, Maine’s only health insurance co-op, will suspend sales of new individual insurance plans for 2016.
No new individual plans will be sold on the insurer’s website after Dec. 15. No new individual Community Health Options plans will be sold through the federal marketplace, Healthcare.gov, after Dec. 26.
The move does not affect any plan renewals, and Community Health Options will not stop selling new group plans.
Community Health Options, which is based in Lewiston, made the announcement Wednesday after consulting the Maine Bureau of Insurance and the New Hampshire Insurance Department. Co-op leaders said they made the decision to suspend individual sales because the co-op had experienced both extraordinary enrollment growth over the past two years and higher-than-expected claims in 2015.
“We need to be responsible and work within the reserves that we have available,” said CEO Kevin Lewis. “I think it’s a responsible measure in light of our current membership and the growth trajectory that we’re on.”
The Maine Bureau of Insurance has been working with the co-op to evaluate its options. Superintendent Eric Cioppa approved the plan to halt new individual sales.
In a statement released Wednesday, Cioppa said the decision was based on the co-op’s third quarter financial statements, which showed a significant loss. And, since the co-op is responsible for more than 80 percent of the individual plans bought by Mainers through federal marketplace, its first priority is to its existing customers, he said.
A bureau spokesman said the freeze on new plan sales is unusual. But, he said, it should be considered within the context of the new insurance environment created by the 2010 Affordable Care Act, including the fact that companies in the co-op’s situation are not allowed to raise rates until January 2017.
Co-ops are health insurance companies run by members for members. They were created through the Affordable Care Act in an effort to increase competition among health insurers and to provide consumers with greater choice in the marketplace.
Community Health Options began selling plans in 2013 and quickly rocketed to the top of Maine’s individual health insurance market, attracting members with its low premiums, broad network of doctors and hospitals and unique program benefits. Initially, it expected to serve 15,500 members in its first year and grow to 40,000 members by 2019.
It now has about 76,000 members in Maine and New Hampshire.
At one point, Community Health Options was the only profitable co-op in the country. But last month, it said it had begun losing money and was operating at a deficit because insurance claims were higher than expected.
Lewis said then that the co-op had enough capital to offset the anticipated $18 million shortfall and was not in danger of closing.
He said Wednesday that Community Health Options is still not in any danger of closing.
“Not in the slightest,” Lewis said.
He believes Community Health Options will resume individual sales “at some point in the not-so-distant future.”
“Whether that happens over the course of 2016 or it’s timed in line with open enrollment for 2017 has yet to be determined,” he said.
Although Community Health Options will stop selling new individual plans this month, other insurers will continue. They include Aetna, Anthem and Harvard Pilgrim Health Care/HPHC.
Aetna plans are not sold through the federal marketplace, which means they cannot be bought using a federal subsidy.
Community Health Options’ news comes during a rough period for co-ops nationwide. So far this year, 12 of the country’s 23 co-ops have closed or announced plans to close, largely due to federal money that did not come through as expected.