Minuteman Health to Form New Health Insurance Entity

Minuteman Health is seeking to organize a new for-profit company, Minuteman Insurance Company, to begin writing business as of January 1, 2018. Minuteman Health will stop writing business as of January 1. During this time period, member benefits and providers will be paid fully and current members will see no interruption in coverage.

Minuteman Health is a nonprofit HMO formed in 2014 as a Consumer Operated and Oriented Plan (COOP) program of the Patient Protection and Affordable Care Act (ACA). The organization is headquartered in Boston and covers approximately 37,000 people in Massachusetts and NH.

The organization cites the ACA's risk adjustment program as a principal driver of reduction in its surplus and capital over time. The risk adjustment program was intended to shift money from health insurers that have healthier members to health insurers who have members who are less healthy than average members. However, according to Minuteman Health, it has been difficult for insurers to predict their risk adjustment obligations, which has led some to withdraw from the ACA market. In addition, the organization says it is subject to certain COOP rules that limit its ability to adjust its business model to mitigate the impact of the program.

With the most recent risk adjustment information provided on June 16, 2017, and after consultation with its insurance regulators in Massachusetts and NH, Minuteman Health will stop writing business as of January 1, 2018. While the organization will not be writing insurance as of January 1, 2018, its existing policies will remain in effect for the rest of this year and claims under those policies will continue to be paid without interruption.  

Minuteman Health is seeking to organize a new Massachusetts health insurer to begin operations on January 1, 2018 in Massachusetts and NH. The new entity, which would not be subject to COOP rules, has filed license applications in both states and is seeking efforts to secure the necessary capital. The organization hopes to fully organize the new insurer in the coming months so that it can offer insurance coverage as of January 1, 2018 and provide continuity of coverage for current Minuteman Health members.

"Forming Minuteman Insurance Company will allow us to address numerous federal restrictions and work to make our coverage available to more people," says Tom Policelli, CEO of Minuteman Health.