Why the Vermont Health CO-OP dissolved - WCAX.COM Local Vermont News, Weather and Sports-

Why the Vermont Health CO-OP dissolved

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SOUTH BURLINGTON, Vt. -

The Center for Medicare and Medicaid Services made the decision to call in the loans to the Vermont Health CO-OP, forcing the nonprofit insurer to close.

"It's certainly a disappointment. It's very sad for all of us here who have worked very hard to try and get this to come to fruition and very sad for Vermonters that they now won't have this option in the marketplace in the future," said Christine Oliver, CEO of the Vermont Health CO-OP.

The nonprofit opened last fall and tried to become a member of the new health care exchange. Each state has the option of offering the co-op model for health insurance, but the Department of Financial Regulation says this co-op was not adequate and wouldn't be able to compete.

But Oliver says the CO-OP would have attracted Vermonters looking for another option.

"As we know with competition in general, it really does change the landscape. It requires others in that competition to be both more innovative," Oliver said.

Right now, residents have two options through the Vermont Health Connect-- MVP or Blue Cross Blue Shield.

The Vermont Department of Financial Regulation says all insurance companies go through the same application process, nonprofit and for profit. But In May, the state denied the CO-OP's license to offer insurance, citing high rates and an unstable business model. Now, the CO-OP is required to pay back all loans immediately.

"The solvency loans we drew on will just be wired back to CMS, the $9.8 million that people keep hearing about, the startup funding that we received in loan format, as well. We will use the remainder of what we have left to settle our claims with vendors," Oliver said.

Oliver hopes her colleagues can continue serving Vermonters in other ways. The shutdown means the co-op's 12 employees will lose their jobs. Vermont also has plans to implement a new health care system in the future-- Green Mountain Care. This will be a single-payer system, meaning it's paid for by the government. That system will go into effect in 2017.

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