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WINhealth (Wyoming) no longer selling new insurance plans

October 22, 2015 (originally published on Wyoming Tribune Eagle-wyomingnews.com)
BY:          Becky Orr
RE:          WINhealth no longer selling new insurance plans

CHEYENE - Thousands of people in Wyoming who have medical insurance through WINhealth Partners will have to find other carriers in 2016.

As of Wednesday, WINhealth no longer is selling new plans.

Wyoming Department of Insurance Commissioner Tom Glause took over company operations on Wednesday.

He did so after determining that WINhealth is financially at risk, according to an insurance department news release.

Laramie County District Court Judge Thomas Campbell signed the order Wednesday to allow Glause and his representatives to handle daily operations at the company, pay claims and help customers find new insurance. Glause had filed court papers the same day, asking for such action.

Campbell's order means WINhealth has been placed into a rehabilitation/receivership that ultimately protects its customers, said Denise Burke, WDI senior policy analyst.

Glause will oversee WINhealth's "exit from the insurance market," the news release says.

The judge's decision does not mean WINhealth will close its doors right away. Instead, the insurance department will work with WINhealth clients to make sure they have coverage.

The transition could take 12-18 months, Burke said. After that, WINhealth will close or be sold.

People on individual insurance plans will have to obtain new ones on the federal insurance exchange during open enrollment. When that starts Nov. 1, they can enroll in a new program as long as they do it before Dec. 15.

Group coverage is going to be handled on a plan-by-plan basis, Burke said.

Meetings will be held with employer groups.

There is only one other company on the exchange in the state, Blue Cross Blue Shield of Wyoming.

Those insured through WINhealth should not panic, Glause said. Experts in the insurance department will help them transfer policies to other carriers, he added.

All claims for WINhealth customers will be paid through the end of the year as long as customers continue to pay their premiums, said Caitlin Rooney, WINhealth spokeswoman.

WINhealth will voluntarily surrender its certificate of authority that allows it to sell insurance.

Signs of trouble surfaced Oct. 8 when WINhealth announced it was withdrawing from the individual insurance market through the federal health-care exchanges in 2016.

Part of the company's problem is that the reimbursement it got from the federal Affordable Care Act is far less than company officials expected, Rooney said.

This occurred Oct. 1 when the Centers for Medicare and Medicaid announced it could only pay 12.6 percent of WINhealth's Affordable Care Act reimbursement.

This meant a company loss for WINhealth of about $4 million. It also meant the company would no longer have a surplus.

"It certainly has a big impact," Rooney said.

Such lower-than-expected reimbursements results from a federal "risk corridor program." That aims to balance costs to insurers by requiring companies that take in more than they pay out to put money into the risk corridor program.

That money would then be given to insurers who pay more in claims than they take in. But WINhealth said the rate of repayments was too unclear to guarantee it could continue meeting its cost obligations.

WINhealth had counted on the money to serve its 8,400 individual members on the insurance exchange, 5,200 group members and about 3,000 third-party members.

"We've been monitoring (WINhealth's) financial condition for some time," Glause said in telephone interview. "The ACA has proved to be financially troublesome, especially for small companies and new start-up companies."

WINhealth does not oppose the state insurance department's actions.

"We fully understand why they are taking the actions they are," Rooney said.

The company has been in complete compliance with the department, she added.

"We knew that choosing to participate in the federal exchange was going to be a big risk," Rooney said. "We went all in; we had the best intentions. We knew it was important for us to be on the exchange and provide the other option for Wyoming residents."

About 60 people work for WINhealth. The insurance department will decide what happens to their jobs.

"We're keeping our heads up. We have work to do and members to serve, and we're going to see it through," Rooney said.

Added Burke, "The most important message to give to the public is not to panic. They are not closing their doors today."

Rick Schum is the president and chief executive officer of Blue Cross Blue Shield of Wyoming. He said in a statement that the action is "unfortunate but certainly reflects the challenges that come with adapting to the changes required by the Affordable Care Act."

Schum said that "our highest priority today is to reassure Wyoming customers that we are already taking steps to help them transition to new health coverage as easily and as quickly as possible."

Guaranteed cash flow during transition.