The Franklin Circuit Court has issued an Order authorizing the Commissioner of the Kentucky Department of Insurance (“KDOI”) to liquidate Kentucky Health Cooperative, Inc. (“KYHC” or “co-op”). KYHC was placed into rehabilitation on October 29, 2015, with oversight of the day-to-day operations by the KDOI. After months of work, it became apparent that further attempts to rehabilitate the co-op would increase the risk of loss to creditors and policyholders.
Unfortunately, come January 2016, liquidation seemed to be the next logical move for the co-op. The co-op blames the Affordable Care Act’s inadequate risk-corridor funding for the closure. KYHC anticipated to receive $77 million from the risk-corridor program but received $9.7 million instead. The co-op had about 51,000 members in all 120 Kentucky counties, who were advised by Governor Steve Beshear to seek coverage on Kynect.ky.gov during the November 2016 open enrollment.