Evergreen Health, one of six remaining Obamacare not-for-profit co-ops, announced this week that it is being acquired by a group of private equity investors. This move will make the insurer a FOR-PROFIT entity.
Under Obamacare, co-ops were given the opportunity to receive low interest loans. Evergreen received $65,000,000 to start up. In signing their contract it explicitly stated that all co-ops were prohibited from either being acquired by or converting to for-profit entities. That all changed in May when CMS issued new regulations allowing acquisitions and conversions to for-profit status.
In order for the acquisition to take effect the Maryland Insurance Administration and CMS must approve the deal. Which puts the Obama administration in a tough spot. Even if the loan repayment continues, how does CMS approve a deal where taxpayer funds with ultra low interest were used to start up the venture? On the other hand, if they don’t approve the deal 38,000 people will lose their insurance.
One last thing that should be most important to CMS and members: who is the buyer and what was the purchase price? Neither of which were disclosed.