LEWISTON — Community Health Options, the state’s only health insurance co-op, has filed suit against the federal government, claiming it owes the co-op nearly $23 million in promised payments.

The co-op says the U.S. Department of Health and Human Services owes it money under the “risk corridor” program, which was established with the Affordable Care Act to help stabilize the country’s new health insurance marketplace. The program spread around money and risk by requiring health insurers with lower-than-expected costs to pay the government a portion of that profit and by requiring the government to give money to health insurers with higher-than-expected costs. 

Community Health Options saw low costs in 2014 and paid the federal agency more than $2 million under the program. But the co-op’s costs soon skyrocketed and it began losing money.

Under the risk corridor rules and federal law, co-op officials say, Health and Human Services now owes the co-op $22.9 million.

“We at Health Options have followed the law and helped expand the Maine and New Hampshire markets and make them leaders in terms of individual coverage through the marketplace,” CEO Kevin Lewis said. “It’s important for the government to make good on its payment obligations.”

Community Health Options isn’t the only insurer that hasn’t been paid under the program and doesn’t expect to be. Last fall, the federal government announced that the program did not take in enough money and so it could not pay out as expected. Insurers were told they’d receive a fraction of what they expected: 12.6 cents on the dollar.


It’s unclear what will happen with the program this year, but “the expectation is they’ll apply the very same approach,” Lewis said.

Co-ops aren’t the only insurers affected, but many co-ops were already in a precarious financial situation last fall and the loss of that promised risk-corridor money proved devastating. Half of the country’s 23 co-ops have since closed.

Community Health Options stayed open but it suspended sales of individual policies in December 2015. Its finances became so worrisome that the Maine Bureau of Insurance kept watch over them.

The co-op has since started to stabilize.

“It’s important to us that we’re paid what we’re owed, but our viability isn’t conditioned on the success of this suit. Our viability is solid,” Lewis said. “We continue to make plans for 2017 and beyond.”

Community Health Options filed its suit Tuesday in the U.S. Court of Federal Claims.


It isn’t the only one to lose money and it wasn’t the first to sue. Those suits include:

• A massive class-action suit filed in February for $5 billion;

• A $223 million suit by Highmark;

• A Blue Cross and Blue Shield affiliate in Pittsburgh, filed in May

• A $180 million suit by Oregon insurer Moda Health, filed in June; and

• A $147 million suit by Blue Cross and Blue Shield of North Carolina, filed in June.


Lewis said Community Health Options could consider joining a larger suit with other insurers, but “we feel we have a strong case and wanted to bring forward the specifics of our case.”

“We are certain there is merit to the case and the law is clearly written,” he said.

The co-op has over 75,000 members in Maine and New Hampshire and is the largest writer of individual health insurance in Maine.

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