Coordinated Health Mutual in Ohio becomes 13th co-op to fail

Another Affordable Care Act co-op has failed, bringing the total number to 13 out of the original 23.

In Ohio, Coordinated Health Mutual is in receivership due to its extensive financial losses in the exchange market under its InHealth Mutual brand, according to Lt. Gov. Mary Taylor, who is also Ohio Director of Insurance.

"Our examination of the company's financials made it clear that the company's losses would prevent it from paying future claims should its operations continue,"  Taylor said in a statement on the Ohio Department of Insurance website.

Taylor was appointed receiver for the ACA co-op after the Ohio Department of Insurance requested the company be liquidated.

InHealth Mutual covers nearly 22,000 Ohioans statewide, with a concentration in central Ohio and the Cincinnati and Dayton areas.

[Also: CMS rule frees up struggling insurance co-ops to seek private capital]

InHealth policy holders who want to keep their federal healthcare subsidy should replace their current policy with another on the federal health insurance exchange within the next 60 days, according to the Ohio Department of Insurance.

Since January 2014, the company sold its InHealth products for both individual and group health coverage.

As company operations wind down, a court order mandates policy holders to continue to pay their premiums, and for providers to honor their contracts for service. Vendors have been told to continue to provide necessary services to the company.

The Ohio Department of Insurance will continue to pay policyholder claims and control the cash reserve held by the company, according to insurance.ohio.gov.

[Also: Senate subcommittee presses CMS on failed insurance co-ops]

Should the reserve and receipts of Coordinated Health Mutual not be sufficient to operate InHealth during this process, the law provides that the Ohio Life & Health Insurance Guaranty Association support up to $500,000 of a policyholder's claims.

Coordinated Health Mutual, Inc. was licensed by the Ohio Department of Insurance in October 2013 as a Consumer Operated and Oriented Plan under the Affordable Care Act. 

The nonprofit co-ops were created to offer consumers a choice in the marketplace by competing with private sector companies  marketing health insurance plans. 

However, out of the 23 originally established, more than half have failed, costing taxpayers over $1 billion, according to a Senate subcommittee that met in March.

Other co-ops are reportedly in financial trouble and could also go under, legislators have been told. 

Twitter: @SusanJMorse