Failed AZ co-op: More than half chose new plans

Posted at 2:39 PM, Dec 14, 2015
and last updated 2015-12-14 16:39:37-05

More than half of the 59,000 Arizonans who will need to change health insurance companies because of the planned Jan. 1 closure of the state's nonprofit co-op have chosen new carriers, officials with the failed nonprofit said.

The rest have until Dec. 31 to choose a new insurer if they don't want to see an interruption in insurance coverage.

The deadline for changing plans without interruption in coverage also applies to people who have insurance with other companies is Tuesday. Those who currently don't carry insurance also need to act if they want it in place on Jan. 1.

Co-op customers who don't act to choose a new plan will have an extra month in this year's open enrollment period to choose a new carrier but will see a lapse in coverage if they don't act by the end of the year. Open enrollment closes Jan. 31, but Meritus Health Partners customers will have until March 1.

Officials with Meritus say they're pleased that so many of their customers have searched for and purchased new insurance. Meritus received the numbers last Wednesday from federal officials.

Meritus said about 30,000 individual insurance customers have chosen new plans, with 27,000 left. The company also has about 2,000 customers in small group plans.

"We characterize it as very good news - our goal was to help our members, once we made a decision, make sure our members knew that they needed to change," said Jim Walsh, the nonprofit's chief operating officer.

The company announced Nov. 24 that it would cease operations at the end of the year. The decision came after the state Department of Insurance suspended its right to sell new policies or renew current ones and placed it under formal supervision because of fears Meritus would become financially insolvent. Federal officials also pulled its policies from the health insurance marketplace website in October.

Meritus is one of 23 co-ops set up as part of a compromise in the Affordable Care Act to compete with for-profit insurance companies. But the co-ops have struggled, and Arizona's became the 11th to stop selling policies or outright fail.

Meritus grabbed a large share of the insurance market last year after lowering its prices. U.S. Health & Human Services Department figures show just over 154,000 Arizonans bought and paid for policies as of June 30. That gave Meritus more than 30 percent of the state total.

Federal officials announced on Dec. 2 that 43,415 Arizona consumers selected a plan through the federal marketplace since open enrollment began Nov. 1. The agency did not break out new enrollees from people with current policies who switched, but nationally, about 700,000 of the 2 million who chose new plans were new.