“This was a difficult decision for the insurer and this agency, but this is what is in the best interests of South Carolina consumers and healthcare providers,” said Ray Farmer, director of the South Carolina Department of Insurance.
Like many other insurance co-ops that have shut down, Consumers’ Choice blamed the steep drop in risk corridor program payouts for its collapse.
CMS recently announced insurers will receive $362 million in risk corridor payments for 2014, or 12.6 percent of the $2.87 billion requested.
The reduction “cast doubt on the collectability of tens of millions of dollars through the federal risk corridor program and led to an unavoidable outcome,” Jerry Burgess, CEO of Consumers’ Choice, said.
The company’s Tennessee-based sister cooperative, Community Health Alliance, said it will shut down by the end of the year for the same reason.
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