New Mexico Health Connections and Minuteman Health of Massachusetts filed their cases on Friday afternoon, arguing the Obama administration mismanaged the program known as “risk adjustment” by creating an inaccurate formula that overly rewarded big insurers.
The co-ops—along with Maryland’s Evergreen Health, which filed the original suit—are among the few such startup insurance companies to have survived after their launch in the fall of 2013. A federal judge on Monday denied Evergreen Health’s request to halt payment while its risk-adjustment lawsuit is considered. Of 23 co-ops that received grants from the federal government to inject more competition into the insurance market, more than half have faltered.