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New Mexico Health Connections, which sells ACA plans, isn't doing well. Photo: Andrew Harnik / AP

New Mexico Health Connections, a not-for-profit insurance co-op funded through the Affordable Care Act, is a month overdue in filing its second-quarter financial paperwork. And the co-op's most recent documents, as well as federal ACA documents, show potentially large financial problems that could force New Mexico to shut the company down.

Why it matters: It's an ominous sign when a health insurer can't close its books, although a spokeswoman for NMHC said the state granted a filing extension. But the ACA's open enrollment for 2018 is not far away. This also could be another potential black eye for the ACA's co-op program, in which 19 of 23 companies have already gone under.

The details: Second-quarter statutory filings from insurance companies had to be submitted to states no later than Aug. 15. NMHC's filings still do not appear in the database run by insurance commissioners. The NMHC spokeswoman said the co-op is "working through this filing," but executives weren't available to comment further. New Mexico's Office of Superintendent of Insurance confirmed it granted a filing extension.

The financial documents that NMHC has posted don't look good:

  • It lost $23 million in 2015 and $17.9 million in 2016.
  • The co-op had only $14 million of capital as of March 2017.
  • NMHC admitted in the documents that "management has evaluated the company's ability to continue as a going concern."
  • There was a major miscalculation of the ACA's risk adjustment program, in which plans with healthier members pay into a common pool that reimburses plans with sicker members. NMHC expected to collect $7 million from risk adjustment for the 2016 plan year. But according to federal data, NMHC had to pay $8.8 million into the program — a $15.8 million swing.
  • NMHC's independent actuary wrote a "qualified opinion" this past March, before the federal data came out, saying there was "significant risk and uncertainty" in the amount the co-op expected to collect from risk adjustment.

Go deeper

2 hours ago - Health

U.S. surpasses 25 million COVID cases

A mass COVID-19 vaccination site at Dodger Stadium on Jan. 22 in Los Angeles, California. Photo: Mario Tama/Getty Images

The U.S has confirmed more than 25 million coronavirus cases, per Johns Hopkins data updated on Sunday.

The big picture: President Biden has said he expects the country's death toll to exceed 500,000 people by next month, as the rate of deaths due to the virus continues to escalate.

GOP implosion: Trump threats, payback

Spotted last week on a work van in Evansville, Ind. Photo: Sam Owens/The Evansville Courier & Press via Reuters

The GOP is getting torn apart by a spreading revolt against party leaders for failing to stand up for former President Trump and punish his critics.

Why it matters: Republican leaders suffered a nightmarish two months in Washington. Outside the nation’s capital, it's even worse.

Erica Pandey, author of @Work
6 hours ago - Economy & Business

The limits of Biden's plan to cancel student debt

Data: New York Fed Consumer Credit Panel/Equifax; Chart: Axios Visuals

There’s a growing consensus among Americans who want President Biden to cancel student debt — but addressing the ballooning debt burden is much more complicated than it seems.

Why it matters: Student debt is stopping millions of Americans from buying homes, buying cars and starting families. And the crisis is rapidly getting worse.

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