Tennessee Healthcare Insurance Co-op Going Out Of Business

NASHVILLE, Tenn. - Tens of thousands of Tennesseans are being forced to new health insurance plans after one of the state's healthcare cooperatives announced it's going out of business.

NewsChannel 5 Investigates has discovered that this comes after state and federal regulators voiced strong concerns about how the insurance group - Community Health Alliance - was being run.

Under the Affordable Care Act, everyone had to get health insurance. Community Health Alliance was created under the health care act to provide insurance to Tennesseans who could not get it anywhere else.

The problem is, according to documents obtained by NewsChannel 5 Investigates, CHA has had a lot of trouble running their health care plan and taking care of their 27,000 customers.

Insurance regulators found problems with the Knoxville-based CHA last year and, in January, told the health plan it could not take on any new enrollees.

Then in February, the Centers for Medicare and Medicaid Services ordered the co-op to make immediate changes, "citing (CHA's) hazardous financial condition, management deficiencies, and complaints regarding inadequate physician networks, failure to pay agents and brokers." It noted that CHA had "failed to comply" with Tennessee insurance laws and regulations."

But, according to a letter sent three weeks ago from the U.S. Department of Health and Human Services to CHA, the situation at CHA has only gone from bad to worse.

And things turned even more dire about a week ago when CHA learned it had lost $15 million in grant money that it had been counting on.

The Tennessee Commerce and Insurance Department then decided enough was enough and told CHA it could either voluntarily shut down or be forced out of business.

Julie McPeak, commissioner of the Tennessee Department of Commerce and Insurance, said in a statement, "This was not a decision that the Department took lightly, but it was the right decision."

If you were covered by CHA, here's what you need to know:

CHA will continue to pay existing claims and members will continue to be covered through the end of the year as long as they pay their premiums. And you will have to enroll in a new health care plan during the Open Enrollment period which starts November 1st. You'll have until December 15th to sign on with a new carrier.

This is not the first health care co-op in the U.S. to go under.

Just last week, Kentucky's Health Cooperative with 51,000 members announced it was shutting down at the end of the year also due to financial problems.

There are four other health care plans available to Tennesseans through the federal health care program. You can find out more information about those on the healthcare.gov website.

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