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11th Obamacare Co-Op Shut Down in Arizona

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With their ability to sell or renew policies suspended, Meritus was removed from the Obamacare exchange by the Centers for Medicare and Medicaid Services (CMS). The company will continue to cover existing policies through the end of the year, but its 59,000 customers will have to shop for new insurance for next year during the open enrollment period that began Sunday.

Meritus appears to have contested the closure until the last moment and even then it refused to sign a consent for the supervision. Meritus says their board was informed of the decision by Arizona’s Director of Insurance last Wednesday. The insurer worked to forestall the closure but on Friday was presented with a “revised regulatory ruling” to which they had just one hour to respond. Tom Zumtobel, the CEO of Meritus, said, “We were caught off guard by this extreme request based on our current and projected financial position.”

Arizona’s Director of Insurance, Andy Tobin, said of the closure, “It’s disappointing that the Meritus CEO and Board of Directors declined to consent to this order.” Tobin added, “with Open Enrollment beginning this weekend and many Meritus policyholders subject to automatic re-enrollment, it was vital that the Department step-in and protect Arizona citizens.”

Meritus Health is the 11th of 23 original Obamacare Co-Ops to shut down. Co-ops in Utah, South Carolina, Colorado, Iowa/Nebraska, Louisiana, New York, Nevada, Tennessee, Oregon, and Kentucky have already closed this year.

Meritus Health was started with $93.3 million in government loans but has lost $78 million since it opened in December 2012.

An Inspector General’s report published this summer found that 22 of the 23 Co-Ops lost money in 2014. Nineteen had claims that exceeded premiums, and 13 of 23 were significantly behind their enrollment projections.

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