Meritus health policy holders get extra month to find new plans

Nearly 60,000 Arizonans are entitled to an extended enrollment period for health insurance due to the closure of Tempe-based Meritus.

Not-for-profit Meritus, the state’s only health insurance cooperative, is winding down its operations. Anyone who has Meritus insurance is entitled to a longer enrollment period through the federal health exchange, a letter sent to policy holders by the U.S. Department of Health and Human Services says.

Open enrollment, when Arizonans can find health insurance via the federal exchange (also called the marketplace) and potentially qualify for federal insurance subsidies, began Nov. 1 and goes through Jan. 31.

Meritus policy holders have an extra month to find new plans — until March 1.

Meritus companies will honor individual and group health insurance plans through the end of 2015 but cannot issue new policies or renew existing policies, the Arizona Department of Insurance says. The department suspended the company after it failed to agree to an order of supervision.

Meritus was incorporated in 2012 as a nonprofit. It received start-up and solvency loans amounting to about $93.3 million from the U.S. Centers for Medicare and Medicaid Services under the Affordable Care Act.

Meritus, which operated as two companies, represented two of 23 healthcare co-ops that formed around the country. The Meritus entities have yet to make a profit and have lost more than $78 million, the Arizona Department of Insurance says.

A health-policy brief from the Robert Wood Johnson Foundation in 2013 predicted the co-ops would face significant financial challenges because the federal funds can’t be used for clinical services or to pay for equipment.

Meritus officials aren’t saying how much of the federal loan has been paid back.

“It’s still too early to determine at this time what the final obligation will be and what the final outcome will be. There’s a lot that still has to happen,” Meritus spokesman Gabriel Rushing said. “There’s still reinsurance money out there and risk adjustment money that still has to be reconciled.”

Leave a Reply