PORTLAND, Maine — The state’s largest Obamacare insurer in the first quarter of the year drew down less than one-fifth of a reserve fund it set aside to pay out 2016 claims.
The Lewiston-based co-op Maine Community Health Options reported to regulators this month that it took out $8.4 million from a $43 million reserve fund it set aside to cover projected losses this year.
Regulators became concerned about the insurer last fall and increased its supervision of MCHO, calling for the co-op to create a financial plan for the year, with monthly goals.
The insurer, which had 82,813 members at the end of the March, has met those goals and drew less than planned from reserves through the first quarter and the Maine Bureau of Insurance said in a statement that the results “were generally consistent” with MCHO’s plan for the year.
MCHO also has cut administrative expenses by more than 15 percent in the first quarter. Those costs had risen by two-thirds last year to about $48 million from about $29 million in 2014.
The insurer had entered the year with higher-than-expected losses as its membership shot quickly to the top of the individual health insurance market established through the Affordable Care Act and run in Maine by the federal government.
The insurer is one of many to request premium increases for 2017, asking for an average increase of 22.8 percent. On the exchanges, those increases are dampened by federal subsidies.
Almost 87 percent of policyholders on Maine’s federally run insurance exchange receive some kind of financial assistance with their plans, according to the U.S. Department of Health and Human Services, which noted in a recent report that tax credits rise with premiums.
Nationally, losses by insurance co-ops have raised concern about their ability to continue to offer plans under the Affordable Care Act. Those co-ops were formed in order to provide competition for private insurers on the new exchanges.