Massachusetts has terminated healthcare plans with a former Obamacare co-op, after receiving financial information about the risks associated with the arrangement.

Minuteman Health Inc. (MHI) won’t be providing insurance coverage in Massachusetts in 2018, as the state terminated its coverage, according to an announcement from the state’s insurance commissioner.

The Obamacare co-op announced in June that it would exit the Affordable Care Act exchanges. On Aug. 2, 2017, the company was placed in rehabilitation by an order entered by the Supreme Judicial Court for Suffolk County, under which Gary D. Anderson, the Massachusetts Commissioner of Insurance for the Commonwealth of Massachusetts, was listed as “Receiver.”

According to the announcement, the Receiver noted that MHI’s financial reports “showed it to be solvent and with adequate funds to pay all insurance claims in the normal course of business, and describing anticipated effects on members’ coverage.”

According to The Washington Free Beacon:

Minuteman Health had high start-up costs and issues with Obamacare’s risk-adjustment program, which shifts money away from those companies with healthier customers to those with sicker enrollees.

“Unfortunately, the program has not worked as intended,” the former co-op said. “The program also unfairly penalizes issuers like MHI that are small, low cost, and experience high growth.”

The insurance commissioner also said that Minuteman Health originally received about $154 million in loans from the federal government, which had been diminished, and additional funds were not available.

“MHI’s capital is ‘thin,'” the insurance commissioner said. “However, approximately $25 million of MHI’s liabilities are for a loan from the United States which is subordinated to MHI’s insurance claim obligations.”

After receiving additional financial information about MHI, the Receiver said MHI had adequate funds to pay all insurance claims, but it was also indicated that the capital “cushion” was reduced.

“Considering the financial risks associated with continuing to provide coverage after December 31, 2017, and the benefits of accelerating the wind-up of MHI’s operations, the Receiver decided to seek authority to terminate all coverage as of that date.”

Many of the 23 co-ops created through the Affordable Care Act have either completely closed or are no longer offering coverage on the Obamacare exchanges.

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