Exchange news: ConnectiCare staying, N.J. co-op to close for 2017

Customers on Connecticut’s health insurance exchange won’t be limited to a single insurer’s plan after ConnectiCare decided not to leave over a rate dispute, while another Affordable Care Act (ACA) co-op is closing in New Jersey.

ConnectiCare had originally told the state’s insurance department it wouldn’t participate in 2017 after officials approved a 17.4 percent average increase in its premiums, below the 27.1 percent it requested, arguing it need to amend its original request due to higher-than-expected risk adjustment liabilities.

According to the Connecticut Mirror, the insurer withdrew its termination letter and its challenges to the rate approval Sept. 13 with no explanation as to why the rates are now acceptable.

"After hearing from state officials, providers and beneficiaries about the importance of our plan to Connecticut, we have decided to move forward into 2017 as a plan on the exchange at the rates approved by the department," ConnectiCarePresident and CEO Michael Wise wrote in a statement.

The insurer covers about 48,000 exchange customers and had said its projected $20 million in losses on its exchange business this year. While politicians and physicians alike said they were pleased with the insurer’s change of heart, they also admitted being confused.

“Well, God bless ’em, I guess,” Connecticut State Medical Society CEO Matthew Katz said to the Connecticut Post. “It is a good thing that we have more, not less insurers on the exchange, so that consumers have more choices.”

There won’t be the same kind of reversal in New Jersey, which is down to two exchange participants for 2017 after the state’s insurance department announced co-op Health Republic Insurance of New Jersey (HRINJ) would be placed into “rehabilitation due to its deteriorating financial condition.”

The co-op is one of several to close down this year. Like its counterparts in Illinois and Oregon, HRINJ blamed its risk adjustment liabilities, which totaled $46.3 million this year, almost triple what the federal government estimated it would owe earlier in the year, according to NJ.com.

“Leadership at HRINJ remains committed to its members and medical providers and will work closely with DOBI under the order of rehabilitation,” the company’s interim CEO, Tom Dwyer, said in a statement. “Despite our hard work and growing customer base, the unfortunate necessity for complying with the ACA’s risk adjustment mandate has put the company under considerable financial strain.”

Co-ops in three states have sued HHS over the risk adjustment payments, claiming the program unfairly benefits more established insurers over new entrants.

HRINJ will continue coverage for its 26,000 individual members and 9,000 small group policyholders until Dec. 31, with the hope it can offer coverage again in 2018.

The closure leaves just six of the original 23 ACA co-ops in operation.