ACA co-ops lose millions in 2015; some expect 2016 profits

The Affordable Care Act's health insurance co-ops absorbed deep financial losses last year, and 2016 is shaping up to be a make-or-break year for these nonprofit alternatives to traditional insurers.

Heading into their third full year of operation, the co-ops are adding customers and improving their coverage, but they also face the end of some government programs designed to support insurers as they build business on the ACA's public insurance exchanges.

"Plan year 2016 is a critical year for these co-ops — they must move from startup to stability and improve their financial capabilities," said Kevin Counihan, CEO of the federal exchange operator HealthCare.gov, during a Thursday hearing held by the Senate's Homeland Security & Government Affairs Committee.

Hospital and medical expenses for Community Health Options more than doubled to $354.7 million, something CEO Kevin Lewis attributes in part to pent-up demand from people who had been waiting for coverage in order to seek treatment.

Beilenson and other co-op leaders say the formula for calculating this risk adjustment is skewed to favor established insurers, and they are talking with government officials about adjusting it.

Evergreen Health wound up running a profit in three of the last six months of 2015, and Beilenson said its newer enrollees have been healthier than initial customers who signed up for coverage because they needed care right away.