DENVER – Officials with Colorado’s health-insurance cooperative filed a lawsuit Monday against state regulators in an effort to continue providing coverage to nearly 83,000 members.
The lawsuit comes after the Colorado Division of Insurance on Friday announced that it was blocking Colorado HealthOP from providing coverage plans next year following a dismal federal funding announcement this month.
The decision impacts 82,785 members in Colorado, including 1,415 people in La Plata County.
The Centers for Medicare and Medicaid Services announced that health cooperatives will receive only 12.6 percent of the funding that was requested to stay afloat under the risk-corridor program. Colorado HealthOP was expecting around $16.2 million, but instead will receive about $2 million.
Given the financial uncertainty of the co-op, state insurance regulators decided the prudent move was to prevent Colorado HealthOP from selling insurance for 2016 in the state’s health-insurance marketplace. With yearly open enrollment beginning Nov. 1, the Division of Insurance wanted to give consumers time to find a new provider.
But officials with Colorado HealthOP believe state regulators acted prematurely, pointing to a positive budget picture. The cooperative is on track to show positive net income going into next year, positioning itself to pay back federal loans under the Affordable Care Act that set the co-ops into motion. The risk-corridor program was supposed to offset costs.
“This lawsuit calls into question the DOI’s decision to release us from Connect for Health Colorado marketplace as both irresponsible and premature,” said Julia Hutchins, chief executive of Colorado HealthOP. “Quite simply, the commissioner’s hands are not tied. She has the discretion to work with us to overcome the injustice that was dealt by the federal government.”
The lawsuit filed in Denver District Court seeks to immediately block the Division of Insurance’s decision pending a legal review. With the open-enrollment period less than two weeks away, time is of the essence. A hearing is expected to be scheduled Tuesday.
A spokesman for the DOI declined to comment on the lawsuit. In a statement last week, Insurance Commissioner Marguerite Salazar said the division had to act quickly.
“It is truly unfortunate, but ... to delay any longer would undermine the open enrollment process,” she said.
