Portland-based InterMed is no longer accepting new patients who receive coverage through Community Health Options, citing the “financial struggles” of the Lewiston-based Affordable Care Act marketplace insurer as the reason.
InterMed, a health care provider with roughly 75,000 primary care patients in southern Maine, made the decision after two consecutive years of multimillion-dollar losses by CHO.
“We accept all three plans offered through the Affordable Care Act marketplace for existing patients, and are accepting new patients who are covered through Anthem and Harvard Pilgrim Health Care,” said InterMed spokesman John Lamb. “Because of their financial struggles, we made the difficult decision last year not to accept any new patients who are covered by Community Health Options.”
A report issued Thursday by the Maine Bureau of Insurance shows that CHO’s financial losses in 2016 exceeded $43 million. As of Nov. 30, the insurance cooperative already had depleted a $43 million reserve it set aside at the end of 2015 to cover anticipated losses in 2016.
A year after becoming the only health insurance cooperative in the country to make money, CHO posted a $31 million loss in 2015 and was forced to set aside the $43 million in reserves to cover potential losses in 2016.
It also came under the close scrutiny of the Bureau of Insurance, which began requiring the co-op to submit monthly financial reports in addition to the quarterly reports required of all insurers. The reports are available on the bureau’s website.
CHO PROJECTS SURPLUS FOR 2017
But CHO, the largest provider of health insurance in Maine through the ACA marketplace, says it is finally on track to generate a surplus in 2017 by raising premiums and cutting costs after two consecutive years of losses.
“I’m pleased that InterMed has remained a valued part of our network for all of its existing patients who are our members, and I trust that InterMed will open its doors to our new membership once they share our same level of confidence in our financial strength,” CHO chief executive Kevin Lewis said Tuesday.
During the current open enrollment period, which ends Jan. 30, CHO has enrolled between 3,000 and 4,000 new policyholders. Only those new CHO policyholders hoping to switch to InterMed as their primary health care provider would be affected by the company’s decision.
Lamb said InterMed is willing to re-evaluate new CHO patients’ eligibility for 2018, if doing so is still relevant after an expected effort by Congress and the Trump administration to repeal and replace the Affordable Care Act.
For its part, CHO has said it expects to weather any changes to the health insurance market brought about by the new administration. It said it is on track to retain more than 50,000 customers in 2017, down from a peak of roughly 85,000. CHO spokesman Michael Gendreau said InterMed is the only health care provider in Maine that has chosen not to accept new CHO-insured patients.
Still, Lamb said InterMed is acting out of concern that CHO might not be able to meet its future financial obligations.
“Unfortunately, our state has seen examples of health plans in financial distress that were not able to pay claims for services provided,” he said.
REJECTING ACA INSURER UNUSUAL
Maine Superintendent of Insurance Eric Cioppa said he is not aware of any history of other insurance providers in Maine going out of business and stiffing health care providers. Still, Cioppa said it is likely that other providers outside of Maine are facing concerns similar to those of InterMed. Cioppa is vice president of the National Association of Insurance Commissioners, a trade association representing insurance regulators.
The Centers for Medicare and Medicaid Services, which oversees the administration of the Affordable Care Act, said it does not collect data on the number of health care providers nationally that have rejected specific insurers in the marketplace because of concerns about their financial stability. However, there are multiple media reports of medical providers throughout the country rejecting certain insurers for various reasons since the act was fully implemented in 2015.
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