Alameda Alliance for Health was immediately removed from the state exchange, called Covered California, because it didn’t meet financial solvency requirements in its application for a commercial insurance license, officials said.
The exchange had given the nonprofit health plan an Oct. 31 deadline to get that license.
Marta Green, spokeswoman for the state Department of Managed Health Care, said Alameda Alliance failed to meet a minimum threshold for tangible net equity, which measures an insurer’s assets minus liabilities.
Alameda Alliance reported $8.4 million in net equity as of Sept. 30, but it needs $19.2 million, according to the health plan’s state filings.
Because of the shortfall, Green said, regulators have put Alameda Alliance and its Medi-Cal managed-care plan under stricter financial monitoring. Alameda Alliance serves about 160,000 lower-income patients outside the exchange.
“It is up to the health plan to get their tangible net equity situation compliant,” Green said. “We will continue to work with them.”
Alameda Alliance said it expects to meet the state’s fiscal requirements and obtain its commercial license in December.
“This is a temporary situation,” said Leila Saadat, the health plan’s chief strategy officer. “We are very confident that we will be able to offer our product on the exchange before the open enrollment period ends” March 31.
For now, the company’s exit leaves Covered California with 11 health insurers overall and only three in Alameda County. In August, Ventura County Health Care Plan dropped out of the exchange.
Peter Lee, executive director of Covered California, said he remains optimistic Alameda Alliance can rejoin the state marketplace at a later date.
“We look forward to the company getting its commercial license so we can welcome its plans back to the exchange,” Lee said.
It’s important for the exchange to have enough competition among major insurers and smaller, local plans to hold down rates and to give consumers ample choices, state officials have said.
Enrollment in the exchange started Oct. 1. The state has notified people who signed up with Alameda Alliance that they must now select another company.
The other choices in Alameda County are Anthem Blue Cross, Blue Shield of California and Kaiser Permanente — the state’s three largest health insurers. By contrast, consumers in neighboring San Francisco and Santa Clara counties can choose from five health plans.
The state estimates that about 80,000 people in Alameda County will be eligible for federal premium subsidies under the Affordable Care Act.