END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

Time: D H M S

MD, NM & MA Co-Ops all report PROFITS in Q1 2016! (Update: ME/NH as well??)

A couple of days ago I noted that after two years of nothing but doom & gloom (and coming just a week after UnitedHealthcare pulled the plug on the individual market in over two dozen states) there seems to finally be some positive developments, with companies like Centene and Anthem reporting better-than-expected results. They may not be making a profit yet, but at least they aren't losing money hand over fist the way they did the first couple of years.

I also made a brief mention of the Maryland Co-Op, Evergreen Health, which reported their first quarterly profit since launching 2 1/2 years ago.

Well, according to Adam Cancryn, Evergreen has been joined by at least two other positive Co-Op stories:

Consumer operated and oriented health plans in Maryland, New Mexico and Massachusetts will report profits in the first quarter, in a sign that some of the remaining Affordable Care Act-created nonprofits could be finding their footing on the state exchanges.

Maryland-based Evergreen Health Cooperative Inc. finished the quarter with $547,000 of net income, it said April 26, in a turnaround from its $2.3 million loss in the same period a year ago. That represented the first profitable quarter in the company's short history.

New Mexico Health Connections generated $420,000 of first-quarter earnings, CEO Martin Hickey said in an email, compared with a $2.3 million loss in the 2015 first quarter. Massachusetts' Minuteman Health Inc. will also finish the quarter in the black, according to a person familiar with the company's financial results. The company lost $3.8 million in the year-ago period.

The early profitability comes as the co-ops' exchange membership continues to grow. Evergreen Health boasted 40,000 enrollees as of March 31, up from 29,679 at the end of 2015, while Hickey said that New Mexico Health Connections grew its customer base to about 48,000, from 32,000 on Dec. 31, 2015. Minuteman's enrollment, meanwhile, will show an 85% jump to about 26,000 members, the source familiar with the results said.

As I noted on Wednesday, there are a lot of caveats here. A single quarter could be a fluke. The fallout from the ACA's "risk adjustment" program could wipe out any profits. The fourth quarter of the year could see a massive spike in insurance claims as enrollees try to squeeze in as many treatments/surgeries as possible, and so forth. If so, that impressive enrollment growth could end up biting the Co-Ops on the ass at the end of the year.

Having said that, however, this is still a far cry from last September/October, when another one of the two dozen ACA-created Co-Ops was melting down every week.

Is the first quarter just an anomaly, or is this a sign of stabilization at last? Stay tuned...

UPDATE: Interesting sidebar: The CEO of a fourth Co-Op, Community Health Options, which operates in Maine and New Hampshire, just wrote an Op-Ed in the Portland Press Herald defending their financial strength:

As Mark Twain once said, “The reports of my death have been greatly exaggerated.” So it is with Community Health Options, the new nonprofit health plan that has a majority of Maine’s individual market and a growing share of the small group market in Maine and New Hampshire.

Despite ongoing success in bringing tens of thousands of people newly into coverage, the recent fiscal deficit triggered this newspaper’s editorial board to label us as being “on the verge of insolvency.” Unfortunately, this misjudgment furthers a damaging narrative of the paper’s own making.

In the context of insurance mega-mergers, our successful launch of Health Options has provided new choices. Our achievement of a majority of the individual market demonstrates the demand for our brand of member-centered coverage.

After an initial year of over $7 million in profit and an additional $3 million in premium rebates to members, the swing in utilization fed the recent sensationalism. The 2015 deficit reflects years of unmet health needs before coverage that only surfaced in the second year. Our reserves, however, give us the wherewithal to weather the storm. Health Options was recently deemed by Maine’s superintendent of insurance to have adequate reserves to give us “time to adjust (our) premiums to reach a better balance sheet.” Even after the 2015 deficit and setting aside $43 million to cover 2016, we have $50 million in reserves remaining.

Evidence of our effective response has been building: Health Options’ administrative expenses for the first two months of 2016 have been lower than even the reduced budget, and claims costs have also been coming in lower than expectations.

We remain committed to improving our members’ health and the purchasing power of every premium dollar. We are on solid financial footing and gaining in strength every day.

The Op-Ed is referring to the fact that CHO, which was the only Co-Op to make a profit in 2014, lost a lot of money in 2015 and expects to lose some more this year before presumably turning things around in 2017.

UPDATE x2: Thanks again to Adam Cancryn, who notes that it looks like CHO actually pulled off a profit again for the first 2 months of 2016 as well.