The finances of Community Health Options, the Maine-based health insurance cooperative, are generally in line with its plan to deal with a potential loss of $43 million this year, according to state regulators.

In its latest monthly update, the Maine Bureau of Insurance said the insurer posted a loss in June that was worse than its business plan had anticipated for the month. But the co-op’s year-to-date loss is slightly better than what the plan forecast.

The bureau is monitoring CHO closely after it reported a $31 million loss for 2015 and set aside $43 million to cover an expected 2016 loss.

CHO was set up as a nonprofit cooperative to provide consumers with an alternative health insurer under the Affordable Care Act, increasing competition and potentially lowering premiums for consumers.

Because of the 2015 loss and anticipated additional red ink this year, CHO is seeking a significant increase in premiums for 2017, although for many customers that increase would likely be offset by higher government subsidies.

CHO posted a small surplus of revenue during its first year of operations in 2014 – the country’s only ACA-based cooperative to do so – but then suffered a big loss in 2015 and projected a continuation of the loss into this year.


In its latest monthly review of the cooperative, the bureau said CHO’s net loss in June was nearly 20 percent worse than had been forecast in the business plan for the year, but that the insurer’s year-to-date loss was 0.8 percent better than expected. The co-op’s drawdown from a $43 million reserve was 2.7 percent more than what was planned for the month, but the year-to-date drawdown is 4.3 percent better.

CHO’s paid claims were 1 percent higher than the business plan in June, but incurred claims were 0.6 percent lower than plan. Year-to-date paid claims were 0.07 percent higher than planned and incurred claims were 0.2 percent lower.

The bureau said the plan attempts to reflect that incurred claims can increase later in the year as customers satisfy deductibles and CHO is required to pay more or all of the health care costs of its customers. That reflects what happened in 2015, when CHO’s losses snowballed as the year went on because the cooperative was responsible for more of its customers’ costs.

The bureau’s analysis of CHO’s operations found that membership was 4.3 percent lower than the plan for June, but 3.7 percent higher than at the end of 2015, when CHO was ordered to stop signing up new customers as the size of its loss became apparent. Maine still accounts for 85 percent of CHO’s roughly 84,000 customers, with the rest in New Hampshire.

The bureau said CHO is due to report its quarterly results for the April-June period later this month.

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