LEWISTON — Maine’s only health insurance co-op lost $31 million last year and expects to lose another $43 million this year, prompting the nonprofit to slash spending, renegotiate rates with doctors and focus more attention on the type of care patients are getting. 

“It’s the old mantra of right care at the right time in the right place, and really working with our members … to get people the care that can, ideally, thwart the need for hospitalizations or re-hospitalizations,” said Community Health Options CEO Kevin Lewis.

It’s a big financial turn for the Lewiston co-op that was hailed as the only profitable co-op in the country a year ago.

Co-ops are health insurance companies run by members for members. They were created through the 2010 Affordable Care Act in an effort to increase competition among health insurers and to provide consumers with greater choice in the marketplace. 

Co-ops have had a rough time. By the end of 2015, 12 of the country’s 23 co-ops had closed or announced plans to close, largely due to federal money that did not come through as expected.

Although Community Health Options was once profitable, its financial situation began to change in 2015. In November, Lewis said surprisingly high claims and utilization rates were causing costs to soar. In December, Community Health Options stopped selling new individual insurance plans. The co-op anticipated an estimated $18 million shortfall by the end of the year.

In recent filings with the National Association of Insurance Commissioners, Community Health Options said it ended up with a $31 million loss for 2015. It expects to lose more than that in 2016.

Lewis said the co-op is in no danger of closing and has no plans to lay off workers. He said it has the reserves to deal with the current and anticipated shortfalls but is also “working aggressively to improve the situation and preserve capital so we enter 2017 in a strong position.”

The co-op has slashed spending in several areas, including cutting nearly all of its $2 million marketing budget and reducing the number of call center workers it contracted for in Fort Kent from more than 30 to five. It’s also trying to lower claims costs by working on new agreements with doctors for rate concessions.

The co-op is setting premiums for 2017 now. It is expected to file its rate request with the Maine Bureau of Insurance in the next few weeks. 

Community Health options has 84,000 members in Maine and New Hampshire. Of those in Maine, 59,500 bought individual insurance and 11,000 are insured through their employer or other group.

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