Commissioner Donelon Takes Control of the Louisiana Health Cooperative
The 19th Judicial District Court has granted an Order of Rehabilitation and Injunctive Relief giving Insurance Commissioner Jim Donelon possession and control of the Louisiana Health Cooperative, Inc. (LAHC, aka CO-OP). The CO-OP is a health maintenance organization (HMO) formed under the provisions of the Affordable Care Act as a non-profit health insurance company. It had previously announced it would wind down operations at the end of this year and not offer coverage in 2016.
“Our on-site review and analysis of the Louisiana Health Cooperative’s operations led us to the decision that placing it in Rehabilitation is in the best interests of its policyholders and providers, as well as taxpayers,” said Commissioner Donelon. “We are convinced that the CO-OP, with the support of the Centers for Medicare and Medicaid Services (CMS), will have the ability to pay claims owed to health care providers and I am confident that we can more efficiently and successfully wind down affairs in a timely and equitable fashion.”
The Louisiana Department of Insurance (LDI) offers the following guidance regarding the rehabilitation process:
What is a Rehabilitation Proceeding?
The Louisiana Insurance Code, La. R.S. 22:2005, authorizes the Commissioner of Insurance to apply by petition to the 19th Judicial District Court for authority to rehabilitate an insurer when certain conditions are met, including when an insurer is found to be in such condition that its further transaction of business would be hazardous to its policyholders, its creditors or the public.
A Rehabilitation Order directs the Commissioner as Rehabilitator to appoint a Receiver, to take possession and control of the property and assets of an insurer. Today’s Order directs the Receiver to “conduct all of the business and affairs of the LAHC…and manage the affairs of the LAHC…until further order of the Court.”
Why was the Louisiana Health Cooperative placed into Rehabilitation?
After examination and review of the affairs of the CO-OP, the LDI concluded that it would be in the best interests of policyholders, healthcare providers and taxpayers for the LDI to wind down the Louisiana Health Cooperative. Because CO-OP policies remain in effect through December 31, 2015, the LDI is seeking the Order of Rehabilitation in an effort to ensure uninterrupted healthcare for policyholders and the timely payment of claims to providers.
How does this Order of Rehabilitation affect me as a policyholder?
For policyholders, it is business as usual – they should continue to pay premiums in the same manner, schedule doctor appointments and be assured that their policies will be honored. No one’s health insurance policy will be canceled.
All individual market (non-employer sponsored) insurance policies end on December 31, 2015. If you have a CO-OP policy, you will need to enroll in new coverage that will be effective on January 1, 2016. The Open Enrollment period for health insurance coverage for the 2016 calendar year runs from November 1, 2015 through January 31, 2016. If you want a new health insurance policy effective on January 1, 2016, you will need to pick a new health plan from a different insurance company by December 15, 2015.
How does the Order of Rehabilitation affect health care providers (e.g. doctors, hospitals, pharmacies, etc.)?
The LDI will work with providers to ensure they are paid in a timely manner. Financial examiners with the LDI believe the CO-OP, with the support of the CMS, will have the ability to pay all claims. The Order states that the Commissioner is entitled to enforce, for the benefit of policyholders, contract performance by any party who had contracted with the LAHC. Providers are required by their contracts to continue treating policyholders.
Who can I contact if I have a question regarding LAHC and the Rehabilitation Proceeding?
Additional information can be found on the LDI website at www.ldi.la.gov/LAHC. Inquiries may be directed to LAHC@ldi.la.gov or to the Louisiana Department of Insurance Office of Consumer Services at (800 259-5300 or (225) 342-5900.