A Tennessee health insurance provider will cease coverage at the end of the year, leaving about 27,000 policyholders looking for new plans.
Community Health Alliance is a Knoxville-based nonprofit health insurance provider created in 2014 under the Affordable Care Act.
CHA President and CEO Jerry Burgess says the company’s current and future financial outlook casts doubts on its ability to provide coverage next year.
“Last week’s announcement of a risk corridor reimbursement of just 12.6% cast doubt on the collectability of over $17 million of CHA’s risk corridor receivable and led to an unavoidable outcome,” said Burgess.
As a result, CHA is winding down its operations and will ultimately cease coverage at the end of the year. However, the company will honor its current policyholders’ plans until December 31stso long as premiums are still paid.
The Tennessee Department of Commerce and Insurance issued a statement on the runoff.
“This was not a decision that the Department took lightly, but it was the right decision,” said TDCI Commissioner Julie Mix McPeak. “With thousands of Tennesseans’ coverage hanging in the balance, CHA’s financial success could not be guaranteed. Ultimately, the risk of CHA's potential failure in 2016 was too great and would have caused substantial detrimental effects on the market as a whole if it were to collapse.”
Tennessee still has four carriers on the Federally Facilitated Marketplace offering coverage for 2016. Residents must re-enroll in a new health care plan during theOpen Enrollmentperiod running November 1st to December 15th in order to receive coverage in 2016.
