Boston-based Minuteman Health, one of the last remaining nonprofit co-op health plans created under the ACA, will close Jan. 1, and plans to reopen as a for-profit business the same day.
The health maintenance organization intends to transition its members to the for-profit payer, called Minuteman Insurance Co., without coverage lapses. Minuteman's approximately 37,000 members in Massachusetts and New Hampshire will see benefits and providers paid in full during the transition.
Minuteman cited the ACA's risk adjustment program as reason for the closure. The risk adjustment program aims to redistribute funds from plans with lower-risk enrollees to plans with higher-risk enrollees. The payer filed a lawsuit against the federal government in August 2016 over the $16.7 million it owes under the program. At the time, Minuteman said while it could make the payments, it "cannot continue to allow CMS to take our members' money illegally and give it to more expensive insurance companies."
Tom Policelli, Minuteman Health CEO, said forming a for-profit company "will allow us to address numerous federal restrictions and work to make our coverage available to more people."