As Mark Twain once said, “The reports of my death have been greatly exaggerated.” So it is with Community Health Options, the new nonprofit health plan that has a majority of Maine’s individual market and a growing share of the small group market in Maine and New Hampshire.
Despite ongoing success in bringing tens of thousands of people newly into coverage, the recent fiscal deficit triggered this newspaper’s editorial board to label us as being “on the verge of insolvency.” Unfortunately, this misjudgment furthers a damaging narrative of the paper’s own making.
In the context of insurance mega-mergers, our successful launch of Health Options has provided new choices. Our achievement of a majority of the individual market demonstrates the demand for our brand of member-centered coverage.
After an initial year of over $7 million in profit and an additional $3 million in premium rebates to members, the swing in utilization fed the recent sensationalism. The 2015 deficit reflects years of unmet health needs before coverage that only surfaced in the second year. Our reserves, however, give us the wherewithal to weather the storm. Health Options was recently deemed by Maine’s superintendent of insurance to have adequate reserves to give us “time to adjust (our) premiums to reach a better balance sheet.” Even after the 2015 deficit and setting aside $43 million to cover 2016, we have $50 million in reserves remaining.
Evidence of our effective response has been building: Health Options’ administrative expenses for the first two months of 2016 have been lower than even the reduced budget, and claims costs have also been coming in lower than expectations.
We remain committed to improving our members’ health and the purchasing power of every premium dollar. We are on solid financial footing and gaining in strength every day.
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