- Meritus Health Partners, Arizona’s nonprofit health co-op, announced last week it has been unable to secure an outside financial backer and therefore intends to cease operations Dec. 31.
- The insurer had already been ordered several weeks ago by the state’s Department of Insurance to stop selling new policies or renewing current ones, and has been under formal supervision.
- Arizona Department of Insurance Director Andy Tobin reportedly blocked Meritus from continuing into 2016 because of concerns the co-op’s finances were too insecure to sustain it through the year.
Meritus, among the half of the ACA co-ops to close or be in the process of doing so, made a strong but unsuccessful effort to save itself in the weeks since CEO Tom Zumtobel says they were caught by surprise by the DOI’s order.
The co-op had attempted to find new financial backing and to change to a for-profit, but Zumtobel said federal officials were not open to that possibility.
“We’ve really been trying to understand all of our options and opportunities and really at this stage we’ve exhausted them,” Zumtobel announced, “So we are working cooperatively with the Department of Insurance to really meet their supervisory order and wind the operation down.”
Meritus, which was launched through a $93 million federal loan, expects to have about $16 million left to repay those loans after it finishes paying claims for 2015, the Associated Press reports.