Ariz. Health Insurers Put Into Receivership

     PHOENIX (CN) — Arizona wants to put two health insurance co-ops into receivership for lack of assets to pay claims after they were suspended from doing business last year.
     Arizona sued Compass Cooperative Mutual Health Network dba Meritus Mutual Health Partners and Compass Cooperative Health Plan dba Meritus Health Partners on Monday in Maricopa County Court.
     The co-ops were suspended and placed under supervision of the Arizona Department of Insurance on Oct. 30.
     They received $93.3 million in 2012 to become co-ops, and served nearly 60,000 Arizonans through the state’s Affordable Care Act marketplace. Since their inception, the insurers have lost more than $78 million.
     Arizona says it found the companies’ continued operations were “hazardous to the public or to holders of its policies,” and ordered that they discontinue all their insurance policies by Dec. 31, 2015. Arizonans covered by the co-ops were forced to switch providers to maintain their coverage.
     “The state’s role is really to protect the consumers at this point,” said Stephen Briggs, a spokesman for the Department of Insurance. “We put them under supervision to basically try to get them healthy again. Now we are taking the next step of putting them under receivership.”
     Meritus discontinued all policies and continued to pay claims, but is unable to pay its debts. The adjusted capital and surplus for Meritus Mutual as of March 31 is more than negative $1.3 million, and for Meritus Health it is more than negative $45.5 million, the state says.
     The state wants to enter the co-ops into a liquidation order with a finding of insolvency “to seek payment of provider claims and to protect enrollees by, among other things, continuing payments for medical services already delivered to enrollees under the insurance coverage and protecting enrollees from collection activities that may be associated with unpaid provider bills.”
     Meritus Mutual is a member insurer of the Arizona Life and Disability Insurance Guaranty Association, so an order of liquidation would authorize the association to pay the insurer’s provider claims.
     Under the Affordable Care Act, 23 state co-ops were formed. Many have struggled, and more than half have foundered.
     Briggs said a judge is expected to rule on the complaint on Aug. 10.
     The Meritus companies could not be reached for comment Thursday.

%d bloggers like this: