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Nevada Health Co-Op to close, leaving thousands to find new insurance

Nevada Health Co-op

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Nevada Health Co-op

Updated Wednesday, Aug. 26, 2015 | 11:35 a.m.

The Nevada Health Co-Op, a consumer-owned and operated health plan created under the Affordable Care Act, is going out of business because of high costs, state officials announced Wednesday.

Consumers insured by the co-op will be covered through Dec. 31, said Janel Davis, spokeswoman for the Silver State Health Insurance Exchange. The Board of Directors for the co-op, which received $65.9 million worth of solvency loans from the federal government, voted to cease operations effective Jan. 1.

The co-op is one of five insurance carriers offered through the Silver State Health Insurance Exchange, which was established by the Affordable Care Act. Participants in the Nevada Health Co-Op were asked to choose other insurance providers when an open enrollment period beings in November.

“It is with deep sadness that based on challenging market conditions, the Board made a painful decision to wind down operations of the Nevada co-op at the end of the year,” co-op member and Board Director Stacey Hatfield said in a statement. “Rather than spending resources on next year’s uncertain market, we would rather make sure we protect our current members. This is all about providing the most affordable, effective health insurance and service possible.”

The co-op sent a letter late Tuesday to members alerting them of the impending closure, Davis said.

“With a second year of high claim costs and limited opportunities for new investment, it has become clear that the amount of growth required to provide quality care at reasonable rates will be unlikely in the next plan year,” Pam Egan, CEO of the co-op, said in a statement.

The nonprofit health co-op enrolled 14,000 members in 2014 and had “significant growth” this year, co-op officials said, but exact numbers were not released. Instead, the co-op noted that future growth projections weren’t large enough to continue operations.

“We appreciate the work done by NHC over the past three years to develop and offer both individual and group health insurance plans on and off the Exchange. Unfortunately, market conditions ultimately proved more challenging for them than expected,” said Acting Insurance Commissioner Amy Parks in a statement. “The decision to voluntarily wind down its operations at this time is a reflection of NHC’s continued focus on doing what is in the best interests of its members. The Division of Insurance will work with NHC to continue that focus and to ensure a smooth wrap-up of its operations.”

When the next open enrollment period begins Nov. 1, members can choose coverage with other insurance carriers. Employer groups can change coverage outside of open enrollment, so the co-op will work with those groups that wish to do so before the end of the year, officials said.

For coverage to remain in effect through the end of the year, members need to continue paying premiums in accordance with their plan rules, officials said. Members can continue seeing the health plan's medical providers, and claims will be paid under the same terms of the plan.

Hatfield, whose family became co-op members when it first started, said she was proud to be involved with the co-op's vision of removing barriers to quality health care, allowing people to access care faster, driving down costs and improving health outcomes.

"A big part of that vision is to responsibly protect our members, providers, dedicated staff and community stakeholders," Hatfield said in a statement. "We made a hard decision, but a responsible one."

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