Vermont Health Co-op Will Shut Down

Sep 16, 2013

An effort by the Vermont Health CO-OP to offer an additional option to consumers seeking health insurance through the state’s new health care exchange has failed.

The Vermont Health CO-OP Board announced late Monday that it is dissolving its operations after the federal government decided to pull its financial support from the organization.

"Without the financial support of our federal partners, it will not be possible to offer Vermonters the member-owned and member-governed health insurance option that will be available to Americans in many other states," said CO-OP CEO Christine Oliver.

The federal action comes after state insurance regulators rejected the CO-OP’s initial application to sell insurance in Vermont because of concerns that the CO-OP model was not financially viable.

The CO-OP resubmitted its application but the state has yet to rule on the revised plan.

In a letter to the CO-OP, James Kerr, the Deputy Director for the Federal Center for Medicare and Medicaid Services stated that the CO-OP’s inability to secure state accreditation means that “we have concluded that the CO-OP is not likely to become a viable” option in the highly concentrated Vermont marketplace.

Kerr also said Governor Shumlin’s goal of implementing a single payer system in 2017 played a role in the federal decision. Kerr said this reality means that the CO-OP would exist only for a few years and “the project faces insurmountable obstacles.”

The VT Health CO-OP has received roughly 14 million dollars to date from the federal government and it’s not clear how much of this money must be repaid.