MONTPELIER, Vt. (AP) -- The state of Vermont has rejected the application of a newly formed health care cooperative that had wanted to offer health insurance as part of the federal health care reform plan because an official didn't think its finances were solid enough to proceed.
Vermont Department of Financial Regulation Commissioner Susan Donegan said she felt the premiums that would be charged by the Vermont Health Co-op were not competitive and she felt the projected enrollment numbers were too optimistic to support a sizeable debt load.
"You know insurance is a promise between a policy holder and a company, I pay a premium and you promise to do something and in this case, it's pay my health insurance medical claims," Donegan told Vermont Public Radio. (http://bit.ly/ZelU5m) "We want to make sure there's enough money to have a company make good on that promise."
The co-op was formed under the Affordable Care Act. It has received roughly $33 million in federal loans. Nearly $7 million has been used for start-up costs and the remaining $26 million was allocated to a reserve fund.
Co-op CEO Christine Oliver said she disagreed with Donegan's decision.
"We are very disappointed but not deterred," she said. "We believe whole heartedly that Vermonters want and need this option, a member driven member focused health insurance option, so we intend to find a way forward to deliver that."
Oliver said there were several options that could be explored, including a possible appeal to the Vermont Supreme Court.