An employee of Connect For Health Colorado explains options and procedures to a walk in client signing up for insurance. (Associated Press file)An aggressive price cut by Colorado’s nonprofit health insurance cooperative this year led to it capturing the biggest market share of the state exchange, but analysts warn the move carries financial risk.A similar co-op serving Iowa and Nebraska was shut down by regulators in January after heavy losses, and the Colorado HealthOP’s losses were even greater when compared to its remaining funds, according to one analysis report.”I would want to watch any cooperative that grew rapidly after a rate cut,” said insurance and risk management professor Scott Harrington at the Wharton School of the University of Pennsylvania. “People, especially regulators, should really be looking closely.” In the second year of the state exchanges, the Colorado edition of the federally created Consumer Operated and Oriented Plans, or CO-OPs, upended the local marketplace by undercutting other plans’ premiums and pushing down federal subsidies available on the exchange.Colorado HealthOP, one of 23 CO-OPs nationwide, reduced premiums on its middle-tier, or silver, plans by an average of 10 percent. Its customer count shot up from about 14,200 in late 2014 to about 75,000 this enrollment period.”We’re right about where we projected we’d be,” said HealthOP chief executive Julia Hutchins. “Growth is really important for stability. You really need a big pool to spread risk effectively.”The Affordable Care Act established the member-governed cooperatives — a political compromise for a quasi-public health option — to spur competitive pricing in the state marketplaces. Yet their relatively small sizes and some cut-rate premiums make them vulnerable to catastrophic medical claims, analysts say.Financial and health policy analysts at Penn and Standard & Poor’s, among others, have sounded the alarm that high medical claims and net losses are a worrisome feature of the cooperatives.Colorado HealthOP reported a net loss of $23 million in 2014 as claims and administrative costs overtook revenue from premiums. “There was pent-up demand for health services,” Hutchins said of the newly insured.To keep the cooperative solvent during the startup period, it successfully applied as … – Click Here To Visit Article Source