Maine Community Health Options will offer insurance through the federal marketplace to people throughout New Hampshire next year, a move made possible by a major federal loan and local success that has surprised industry experts and allowed the company to dominate the Maine market.

The insurance cooperative’s original plan called for a more gradual expansion into four of New Hampshire’s 10 counties in 2015 and the rest of the state in 2016. But chief executive Kevin Lewis said the plan accelerated when the U.S. Centers for Medicare and Medicaid Services last week approved the full $67 million, 15-year loan. That’s on top of the original $65 million loan that the group had landed to begin operations in Maine.

Cooperatives are an often-overlooked component of the Affordable Care Act and were designed as an alternative to traditional insurance companies, especially in states where there might be limited choices. In the co-op model, the governing board is ruled by its members, and any profits are plowed back into operations. In a traditional insurance company, profits can be distributed to shareholders.

Co-ops exist in 26 states, according to the National Alliance of State Health Co-Ops. Through the health insurance marketplaces created by the federal law, where people can apply for subsidized benefits on, the cooperatives offer plans against big players in the industry, such as Aetna, Anthem Blue Cross Blue Shield and State Farm.

Nationwide, the co-ops have had varying levels of success, but health experts rated the co-op in Maine an overwhelming success.

Despite being a startup competing against longtime insurer Anthem, Maine Community Health Options captured 83 percent of the 44,000 Mainers who signed up for insurance on the marketplace in 2014, surprising state health care experts. The co-op and Anthem offered similarly priced plans, and yet most chose the new nonprofit over the established company.


“Maine was hungry for an alternative,” said Mitchell Stein, a Cumberland-based independent health policy analyst.

Lewis said Maine Community Health Options’ success in Maine likely led to federal officials being comfortable awarding the $67 million loan to expand into New Hampshire.

“The strengths of our existing business probably helped us get the additional funding,” he said. “It’s an important year for New Hampshire, and being able to go statewide is a simpler message for residents. People cross county lines all the time, just as they cross state lines.”

The cooperative’s workforce will likely increase by about one-third – from the 100 employees today to more than 130 by January 2015, Lewis said.

While some of the additional workers will be located in New Hampshire, Lewis said many will work out of the co-op’s headquarters in Lewiston. At this point it’s difficult to predict what percentage of the new employees will be based in Maine, he said, but it will be a significant number.

Before winning the statewide loan, the co-op had planned to offer insurance in Rockingham, Strafford, Carroll and Coos counties – all bordering Maine. That’s because people live their lives across state lines, sometimes living in Portsmouth, New Hampshire, while working in York County, for example. Similarly, many people will live in one state but see a doctor across the border, Lewis said.


While New Hampshire had only one insurance company on the marketplace this year, Maine Community Health Options will be one of five insurers that consumers can choose from in 2015. In Maine, Harvard Pilgrim is joining the cooperative and Anthem on the 2015 marketplace.

Stein said the co-ops did not uniformly succeed or fail. For every success story, such as Maine, other co-ops did not catch on. In Vermont, a co-op failed in 2013 after the state’s insurance bureau refused to grant it a license in part because of concerns about financial viability. Stein said that in states where consumers could choose from numerous insurance carriers, co-ops simply got lost in the shuffle, while in other states the people launching the co-ops were not as competent as the group that started Maine Community Health Options.

“The ACA proved that there was nothing inherently wrong with the theory or concept of a co-op,” Stein said. “Whether they succeeded or failed often depended on the quality of the implementation.”

Average health insurance premium rates for 2015 in Maine will be about the same or slightly lower for marketplace consumers – depending on the plan chosen – according to the Maine Bureau of Insurance. Residents can enroll between Nov. 15 and Feb. 15.

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