LEWISTON — For the first time since it began selling health insurance two years ago, the state’s only insurance co-op is losing money.

Community Health Options said Wednesday that it posted a deficit for the third quarter of 2015. It projects an $18 million shortfall by the end of the year.

The co-op budgeted $334 million in premiums for 2015.

At one point, Community Health Options was the only co-op in the country to be profitable. CEO Kevin Lewis said this end-of-the-year deficit was a surprise.

“The claims coming in are higher than what we anticipated, higher on a per-member, per-month basis than last year,” Lewis said. “It’s hard to tell whether this is a new normal or whether this is a kind of a peak that will be followed by a lessening of claims and utilization.”

Co-ops are health insurance companies run by members for members. They were created through the 2010 Affordable Care Act in an effort to increase competition among health insurers and to provide consumers with greater choice in the marketplace. 

Community Health Option’s financial news comes during a rough period for co-ops. So far this year, 12 of the country’s 23 co-ops have closed or announced plans to close, largely due to federal money that did not come through as expected.

Lewis said Maine’s co-op has enough capital to offset the shortfall and is not in danger of closing.

Community Health Options does not plan to lay off workers, but it has issued a freeze on creating new positions. 

“We’re working diligently to be as lean and efficient as we can,” Lewis said. “And it puts an even greater focus, I think, on our call to action, which is lowering total cost of care, and doing so in a way that reflects our mission, which is improving health outcomes.”

Lewis said the situation is complicated by two things: Many of the co-op’s members are new to insurance, so it’s difficult to predict their medical expenses, and the co-op has to set its insurance rates for the next year long before it knows how much money it will pay out for the current year. 

“We were trying to project forward our rates for 2015 back in the spring of 2014,” he said. “It does make it extremely challenging, forecasting that far into the future.”   

Despite the deficit, Lewis said Community Health Options remains in a “very solid position.”

“The fact that we have such an excellent team here and, I think, very compelling benefits and a strong relationship with providers bodes very well for a very good 2016,” he said.

A spokesman for the Maine Bureau of Insurance, which oversees insurance companies in Maine, said financial report fluctuations are expected with many new companies, but “the size of the recent loss requires special attention and extra monitoring.”

Spokesman Doug Dunbar said the Bureau of Insurance and Centers for Medicare and Medicaid are closely following the situation and working with the company. However, he noted that the co-op has about $23 million in surplus and access to another $74 million from the federal government, as of the end of September.

The current deficit will not affect individual insurance rates for 2016.

Community Health Options has about 70,000 members in Maine and New Hampshire.

ltice@sunjournal.com