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Kentucky health co-op postpones entrance into W.Va. marketplace

The Kentucky Health Cooperative, which announced in May that it would enter West Virginia’s health-care marketplace in 2015, has announced that it will postpone its entry for one year amid concerns that its infrastructure is not yet prepared to handle demand in the state.

Joseph Smith, chairman of the KHC, said the decision to postpone was made to ensure the new West Virginia Health Cooperative would be truly prepared and said he fully expects the co-op to be functional by Jan. 1, 2016.

“We want to be sure we are prepared to do it well,” Smith said. “In our first year in Kentucky, we had an enrollment of probably close to twice of what we expected, and in that process we found bugs, and we want to make sure we’re doing everything correctly for the state of West Virginia.”

Although the announcement came just two days after an election in which Republicans took control of both houses in the U.S. Congress and the West Virginia Legislature, Smith said any fear that the Affordable Care Act might be repealed did not factor into the decision.

“We’d made this decision before Election Day,” he said. “We will be there in 2016.”

Health insurance cooperatives, unlike private health insurance companies, are owned by the people they insure. Co-ops like the Kentucky Health Cooperative are not government-run, and are designed to provide an alternative to state-provided and single-payer insurance coverage.

The co-op had submitted health-care plans to the West Virginia insurance commissioner, which were approved, but Smith said the infrastructure just isn’t ready.

“We don’t want to be in that position,” he said. “The people who participate in the co-op are owners.”

The co-op’s withdrawal means that Highmark West Virginia will once again be the only insurer participating in the state’s marketplace. West Virginia Insurance Commissioner Mike Riley said next year’s marketplace will still feel the co-op’s presence, though. The KHC submitted plans and prices for 2015 alongside Highmark, which was made to price more competitively and, even though the co-op will not participate, he said, Highmark’s 2015 rates are set and will not change.

“They have been established and approved by our office, so they won’t be changing them this year,” Riley said. “They still have competition from those outside the exchange . . . . Highmark did file with the expectation the co-op would be in the marketplace. I think competition is good and, generally, it leads to pressure for lower prices.”

Erin Snyder, health policy analyst for the West Virginia Center on Budget and Policy, said that while the co-op had its experience in the Kentucky marketplace to help guide it, forging a presence in West Virginia in time for the 2015 marketplace would be difficult. In contrast, Highmark already had been operating in West Virginia and had a well-established network of providers contracted with the insurer.

“Highmark has all of their contracts in place and experience with rate-setting in the state, and that is a disadvantage to the co-op,” she said.

The KHC is a Health Insurance Consumer Operated and Oriented Plan that was created last year to participate in the ACA insurance exchange. For more information, visit https://mykyhc.org.

Reach Lydia Nuzum at lydia.nuzum@wvgazette.com, 304-348-5189 or follow @lydianuzum on Twitter.

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