By Katie Kerwin McCrimmon

Colorado’s newest health insurance carrier, the Colorado HealthOP, has scored nearly 40 percent of the state’s health exchange sign-ups.

As of the end of the open enrollment season on Feb. 15, Colorado had about 139,652 people sign up for private health insurance. Of those sign-ups, the HealthOP, a new nonprofit co-op, has netted 54,591 sign-ups. Kaiser Permanente of Colorado last year picked up about 46 percent of the market and the HealthOP attracted 12 percent of enrollees. This year, the HealthOP surpassed Kaiser. For 2015 plans, Kaiser Permanente scored about 49,500 exchange enrollees — or about 35 percent of the exchange market share.

The Colorado HealthOP, a new upstart insurance co-op, scored nearly 40 percent of sign-ups on Colorado’s health exchange. Photo courtesy of the Colorado HealthOP.

Together, the two nonprofits won the business of three out of every four customers who bought private insurance for 2015 through Colorado’s exchange, Connect for Health Colorado.

Other large players in Colorado’s insurance market, including Anthem and CIGNA, have declined to reveal their exchange market share.

The HealthOP rocked Colorado’s insurance market by offering the lowest-priced plans in nearly every region of the state for 2015. Because tax subsidies under the Affordable Care Act are linked to the lowest priced “silver” plans in each region, many customers who did not switch to HealthOP plans found themselves receiving lower tax subsidies and paying more overall for health coverage this year.

While many critics blamed the HealthOP for cuts in subsidies, managers there said the whole point of health reform was to enhance competition.

“Our goal is to bring affordable health care to all Coloradans, to be a transformational option for individuals and to band together to be able to afford and impact their insurance coverage,” said Julia Hutchins, the HealthOP’s CEO. “How do we bring high-quality, low-cost coverage to Coloradans?”

In off-exchange business, Kaiser picked up 32,000 more customers while the HealthOP netted another 25,990 members. In financial disclosures filed on Monday, the HealthOP reported $23 million in losses for 2014.

Hutchins said both sign-ups and losses are in line with projections. She said that the HealthOP hoped to enroll about 75,000 customers by mid-February and should exceed that number once everyone who has signed up pays.

Kaiser spokeswoman Amy Whited also said sign-ups there were in line with projections.

“Given the fact that the subsidies changed, it was encouraging to see so many people choose Kaiser again,” Whited said.

Hutchins said low prices at the HealthOP certainly attracted new customers, but she thinks people also want a new kind of health insurance partner.

“I’d love to believe a big part of it is who we are. We’re a health insurance co-op that is focused on serving individuals,” Hutchins said. “And individuals are really hungry for a health plan that supports them in being healthy, staying healthy and having a say (in health care choices).”

She said many people shopped on choice. But about half of the people who picked HealthOP plans paid more to sign up for broader networks that would give them greater choice of doctors and hospitals.

As for the $23 million loss, Hutchins said the HealthOP projected that it would not be profitable for at least three years.

Some insurance brokers have accused the HealthOP of dramatically undercutting competitors to deliberately “buy the market.” The co-ops around the country have been built with low-interest federal loans and some critics worry that they could become unstable over time. In late December, the Iowa/Nebraska co-op failed.

“Claims exceeded premiums dramatically,” said Hutchins, who just returned from a national gathering of health co-op managers.

She said Colorado’s co-op by comparison to the Iowa/Nebraska model is healthy and strong, and that regulators from the Division of Insurance have certified that the HealthOP’s finances and projections are sustainable.

She said, however, that the HealthOP’s 2014 losses show that people who haven’t had health insurance have pent-up demands for care.

“(The losses) reflect the very real needs that our members had in the first year of getting coverage. This is no different than what you’d see at any other carrier that is seeing a newly-insured population in the first year,” Hutchins said.

It’s also expensive to get a health insurance company running.

“The reason there hasn’t been a startup health insurance company (in Colorado recently) is because it’s expensive and hard and complicated,” she said. “Being different takes money too.”

As the number of members rise, fixed costs can be shared more widely.

She said the HealthOP had projected at least $15 million for startup costs alone.

“A lot of the startup and infrastructure costs were much higher than they will be going forward,” Hutchins said.

She said the future for patients and the Colorado HealthOP’s business looks bright.

“We’re well positioned to provide extraordinary value to consumers in Colorado, are on track with where we want to be, and feel good about our current and future health.”