InHealth insurance leaves local customers hanging

Credit: DaytonDailyNews

Caption
Local policyholders can't get their prescriptions filled sine the state took over the Columbus area insurer, InHealth, because it didn't have enough money to pay claims.

Credit: DaytonDailyNews

An Ohio health insurance cooperative has joined a long list of co-ops formed under the Affordable Care Act that have been forced out of the federal health insurance marketplace, leaving some local customers in a lurch.

Coordinated Health Mutual, which insures nearly 22,000 Ohioans under its InHealth Mutual brand, was taken over by the state late last month after the Ohio Department of Insurance determined it didn’t have enough money to cover claims and remain in business.

“Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” ODI Director and Lt. Gov. Mary Taylor said in a statement.

ODI has agreed to pay all claims while it liquidates the insolvent Westerville, Ohio-based company’s assets and winds down its operations under a court order from Franklin County Common Pleas Judge Kim Brown.

Under the order, policyholders are required to continue to pay monthly premiums, while providers must continue to honor their contracts for service.

But some local customers said their InHealth policies are no longer paying for prescriptions, and their pharmacies have refused to fill orders for their medications.

“My ex-husband and I both have individual InHealth policies, but he went to his pharmacy recently and couldn’t get a prescription filled for his heart medicine,” said Sarah Stickelman, a 63-year-old self-employed business owner in Centerville, who said she pays more than $885 a month in premiums for her policy. “I’m keeping my fingers crossed that the same thing doesn’t happen to me.”

Stickelman said she called ODI to complain and was told her best option would be to sign up for a different health plan through the Ohio’s federally run health insurance marketplace.

But when Stickelman contacted her health insurance broker, she said she was told she couldn’t sign up for a new plan until the next open enrollment period begins later this year because she had not undergone a life event that qualifies her for special enrollment, such as losing a job.

“What am I suppose to do? They said I’d be breaking the law if I didn’t keep my health insurance. But it’s hard to make that premium payment and then have to pay for medications on top of that. If they don’t get this mess cleaned up by the time my next premium is due, I’m not going to pay it.”

Robert Scott, a Beavercreek businessman who is self-insured with InHealth, said he couldn’t get his prescriptions filled, either.

“I’m on about 13 kinds of medicines that I just can’t do without,” said Scott, 51, who suffers complications from diabetes and heart disease, among other ailments. “I’m not in a position where I’m broke and out of money, but my medications add up to a couple thousand dollars a month, and that’s not something I want to get stuck with. I know there are a lot of people out there less fortunate than me who are just now finding out that they don’t have any drug coverage.”

Coordinated Health has policyholders throughout the state with the largest concentrations in the Columbus area, followed by Cincinnati and Dayton.

It’s unclear how many InHealth policyholders have been having problems filing prescriptions. ODI officials could not be reached immediately for comment. But the agency’s website instructs consumers with questions to call ODI’s help line at 1-800-686-1526.

Coordinated Health was one of 23 co-ops formed under the health care law as lower-cost options for consumers buying plans on and off health insurance marketplaces in several states.

They were initially funded with about $2.6 billion in low-interest loans authorized under the health care law. But that was only a fraction of the original $6 billion request for funding, which was slashed by the Republican-controlled Congress.

In addition, the co-ops and other marketplace insurers had expected to receive money from a temporary risk-corridors program intended to protect insurers from unexpectedly large claims. But Republicans in Congress also severely restricted the amount for which insurers could be reimbursed for sustaining significant losses.

More than half of the original co-ops had shut their doors by the end of last year, in large part due to financial losses tied to a sicker-than-average patient population.

Several of those insurers have filed a class-action lawsuit against the government claiming they’re owed about $5 billion in risk-corridor payments.

Kelly Crowe, CEO of the National Alliance of State Health CO-OPs, said limiting the risk-corridor payments may have set up Coordinated Health for failure.

“As the news out of Ohio further illustrates, health insurance is a challenging business,” Crowe said in a prepared statement. “Over the last year it’s been shown that some CO-OPs were not adequately funded and did not have the same vast reserves as existing insurers to be able to weather their first years as start ups. Combined with the ongoing challenges of the risk stabilization programs, CO-OPs and other new, small, and fast growing insurers are operating in a very tough environment.”