Consumers Choice Health Plan to stop offering plans in 2016


We were extremely disappointed today to learn that South Carolina residents will no longer have access to Consumers Choice Health Plan on the health insurance marketplace for 2016. Full details from the SC DOI press release below.



Consumers’ Choice Health Insurance Company Agrees to Wind Down Its Operations

COLUMBIA, SC – Consumers’ Choice Health Insurance Company (Consumers’ Choice) has agreed to a voluntary run-off and will not offer health insurance coverage in 2016.
“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 health care providers,” said Ray Farmer, Director of the South Carolina Department of Insurance. “The recent announcement of a risk corridor reimbursement of just 12.6% cast doubt on the collectability of tens of millions of dollars through the federal risk corridor program and led to an unavoidable outcome,” said Jerry Burgess, President and CEO of Consumers’ Choice.

The decision to run off its existing book of business means that Consumers’ Choice will not offer plans for 2016 and any policies that became effective in 2015 will terminate at the end of this year. As a result, approximately 67,000 individuals and small businesses will have to shop for new coverage for 2016 as they will not be able to keep their current coverage. Ultimately, the decision was made to wind down operations because the company’s financial condition could worsen significantly. This decision comes now because it is much easier for consumers to transition
to a new plan effective January 1, 2016 than it would be to move in the middle of a benefit year.
“The South Carolina Department of Insurance will do everything it can to assist South Carolinians through this process,” Farmer said. “In the coming days, weeks and months, Consumers’ Choice will continue to focus all of its efforts on taking care of its members and also working with the South Carolina Department of Insurance as well as the Centers for Medicare & Medicaid Services to help ensure a smooth transition,” added Tim Ervolina, Chairman of the Board of Directors for Consumers’ Choice.

Consumers’ Choice is required to submit a run-off plan to the Department “This should be an orderly runoff of the company’s business. Our expectation is that the company will honor its existing commitments to policyholders and health care providers as a part of winding down its operations. The Department has monitored the financial condition of this insurer very closely since licensure and will continue to do so until this process is complete,” Farmer said.
The Department has compiled an initial list of Frequently Asked Questions for impacted consumers and providers, which are attached to this release and available on the Department’s ACA page.

Consumers’ Choice Health Insurance Company (CCHP) Not Offering Plans in 2016

FAQs & Important Information for Consumers and Providers
1. Why is CCHP closing?
After coordinating with state and federal regulators regarding CCHP’s operations and its long-term sustainability, the decision was made to discontinue offering plans after 2015.

2. How will CCHP closing affect my current insurance coverage?
Current plans will continue uninterrupted through December 31, 2015. Members can continue to use their insurance through that time period and continue to submit claims for all medical expenses that occur through December 31, 2015.

3. Do I need to keep paying CCHP?
Yes. You should continue to pay your insurance premiums through the end of December to have

4. Can I get a replacement policy now?
No, but members will be able to choose a new health insurer for 2016 during the next open
enrollment period, which begins on November 1, 2015 and runs through January 31, 2016.
Consumers should enroll in replacement coverage by December 15, 2015 to have insurance on
January 1, 2016.

5. Where can I get help finding a new policy for 2016?
If you are receiving federal subsidies, you must enroll in a Qualified Health Plan through the Federal Marketplace. You can shop for a new plan by working with an agent, broker, or navigator or by calling the Marketplace at 1-800-318-2596. Plans for 2016 can also be reviewed at or Additional helpful information is available at the South Carolina Department of Insurance ACA page by clicking here. VIEW PLANS HERE

6. Will my current plan change today?
No, there will be no change in your current plan and CCHP will continue to process claims incurred through December 31, 2015.

7. Can I continue to see my doctors and have my prescriptions filled?
Yes, members can continue to use their insurance as they have all year. The provider network
should remain in place through 2015. When you shop for new coverage for 2016, be sure to check
the network directories for other companies to ensure your doctors and preferred facilities are
members of those networks.

8. What can providers expect?
The provider network should remain in place through 2015 and the company will continue to
process claims.

9. Who should I call if I have questions?
If you have coverage questions, you may contact CCHP at 1-800-580-8736.



6 Responses

    1. Hi Melvin, thanks for stopping by our blog! The primary reason for Consumers Choice deciding to stop offering plans is due to change in the risk corridors made via the CROMNIBUS budget bill passed in December 2014. Instead of being reimbursed on adverse claims as directed by the Affordable Care Act in 2010, changes by Congress lowered reinsurance payments to 12.6 cents on the dollar!

      1. Thank you. Yes, I read that was the ultimate reason, and clarifying it was “Obama administration’s decision” to reduce funds, right?

        The CO-OPs had unexpectedly high coverage costs (sick, elderly) and lower premium revenue, or lower than expected numbers signing up? And so the billions of dollars in startup costs for CO-OPs paid by the government (ie, our tax dollars) is gone, right?

        1. By all accounts, it was Congressional Republicans that amended the risk pool funding mechanism during the drafting of CROMNIBUS. To give credit where credit is due, Congressional Republicans have said if they cannot repeal the ACA, they would take it apart piece by piece. This seems to be part of that strategy.

          In regards to the high coverage costs, this was expected and experienced by ALL carriers; not just Co-Ops, which is why the ACA, as originally drafted, included mechanisms to minimize these impacts on the marketplace. To see how this impacted traditional insurers, one simply needs to look to North Carolina, where BlueCross NC had to readjust rate increases to 34.6% average, statewide. In regards to enrollment numbers for Co-Ops, it was a case by case basis. Consumers Choice actually exceeded enrollment projections from their business plan filed for the federal loan. In addition, they were on track to be profitable sooner than anticipated by their business plan. Based on publicly available 2014 year end data, CCHP had net losses or approximately 1 million vs. 3 million projected, and was the 2nd best performing Co-Op nationwide, by most measures, trailing only Maine’s Co-Op. On the other hand, Co-Ops in Tennessee and Louisiana certainly experienced lower than anticipated enrollments for 2014.

          1. Well I don’t pretend to understand much of this, and I appreciate the explanation, but it also seems like Cromnibus would not have passed w/out Democratic support (57 Dems for, and it passed by 13 votes) and B. Hussein Obama certainly wanted it. And of course the 12.6% number comes from the fact that only $362 million was paid in, but $2.87 Billion in claims were made…. so claims were 8 times higher than planned and the taxpayers weren’t going to be on the hook for that full amount. And if things are crashing and burning this soon after its implementation, ACA seems even more like a bad idea.. just my opinion

  1. Great Article. You touched on a topical issue. I would appreciate if you’d written about how to fill a form online. Just look at the service Its pretty easy to use. I think you can get a free trial if you ask for it.

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