Maryland Co-Op Files Suit Over CMS’ ‘Outrageous’ Risk Adjustment Formula
Evergreen Health Cooperative Inc. wants to avoid paying $22 million in fees.
The Wall Street Journal:
Maryland’s Health Co-op Sues Over Health Law’s Risk-Adjustment Formula
Maryland’s health cooperative filed a lawsuit Monday seeking to block the federal government from requiring it to pay more than $22 million in fees for a program designed to cover insurance company shortfalls. The lawsuit by Evergreen Health Cooperative Inc. is the latest twist in the saga of health insurance co-ops set up under the Affordable Care Act to compete against larger, established insurers. The co-ops were supposed to help keep premiums down by injecting competition into the industry. (Armour, 6/13)
The Washington Post:
Maryland Health Co-Op Sues Over ‘Flawed’ Obamacare Requirement
Peter Beilenson, chief executive of the 40,000-member co-op, said in a statement Monday that the system is providing “a financial boon for the country’s largest and most established health insurers, at the expense of new, innovative insurers.” He added that the cost would eat up 26 percent of Evergreen’s 2015 revenue from premiums. CMS declined to comment on pending litigation. Evergreen is required to make the payment under CMS’s “risk adjustment” program, an element of President Obama’s 2010 health-care overhaul that aims to provide financial protection for organizations that participate in the new health-care exchanges and end up with sicker, more expensive customers because of a rule that prohibits them from denying coverage for preexisting conditions. Under the system, insurers with healthier patients pay those with sicker customers. (Hicks, 6/13)
The Baltimore Sun:
Evergreen Health Co-Op Suing Federal Government Over Insurance Program
While the charge won't put Evergreen out of business, it would be a big setback for one of the most successful and one of the few remaining health insurance co-ops established by the federal health reform law. The higher-than-expected fee could wipe out nearly half of Evergreen's reserve cash, the suit said, putting the co-op's solvency at risk, and destroy plans to meet a major milestone in 2016 — profitability. (Gantz, 6/13)
