A bigger loss than anticipated in December pushed Community Health Options further into the red in 2016.

The Lewiston-based health insurance cooperative, established to provide coverage under the Affordable Care Act, said it ended 2016 with a $58.3 million operating loss, which was $14.4 million more than it had planned, according to preliminary figures released by the Maine Bureau of Insurance.

The insurer, which covers about 48,000 Maine policyholders, said it ended the year with remaining capital and reserve funds totaling $37.4 million after covering the operating loss. The co-op said it does not anticipate another operating loss in 2017 thanks to premium increases and cost-cutting measures.

“Consistent execution of the 2016 business plan has given us great momentum,” CHO spokesman Michael Gendreau said via email. “We’re entering 2017 in a stronger position because we have solid capital and good membership levels, as well as adequate premium rates and the capital to support the current membership with great service.”

According to the bureau’s report, CHO experienced an $11.2 million net loss in December, which was $9 million higher than it had planned. The $9 million was a one-time adjustment to previously reported income from premiums and did not reflect deteriorating performance toward the end of the year, the report says.

The co-op is still processing December claims so final 2016 figures will not be available until March.


CHO had been operating throughout the year under enhanced oversight from the bureau. It was still recovering from 2015, its second year of operation, when it lost $31 million. Much of that loss was attributable to higher-than-expected claims and a regulatory cycle that prevented CHO from raising premiums.

As of Nov. 30, the insurance co-op already had depleted a $43 million reserve it set aside at the end of 2015 to cover anticipated losses in 2016.

CHO has attributed the higher-than-anticipated losses in 2016 to reduced premium income resulting from having fewer customers than it expected.

As of Feb. 1, CHO had about 48,000 members, down significantly from its peak membership of about 84,000.

A year after becoming the only health insurance cooperative in the country to make money, CHO posted a $31 million loss in 2015 and was forced to set aside the $43 million in reserves to cover potential losses in 2016.

It also came under the close scrutiny of the Bureau of Insurance, which began requiring the co-op to submit monthly financial reports. The reports are available on the bureau’s website.


To rein in losses for 2017, CHO raised individual premiums by an average of 25.5 percent, eliminated elective abortion and adult vision care coverage, and increased deductibles by as much as 470 percent for out-of-network care. Increases in federal tax breaks will offset the bulk of premium increases for most policyholders.

In addition, CHO implemented several administrative cost-cutting measures and pulled out of New Hampshire to focus solely on Maine.

The co-op acknowledged in January that it faces an uncertain future as the Republican-controlled Congress seeks to repeal and replace the Affordable Care Act. Still, Gendreau said Tuesday that CHO remains on solid financial ground and intends to continue providing health insurance to Mainers regardless of what happens to the law.

“We’re committed to remaining in the health insurance marketplace,” he said. “We’re committed to the people in Maine.”


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