Eight months have passed since Utah’s Arches Health Plan dissolved, and yet the co-op still owes medical providers in the state a total of $33 million in unpaid claims.

“Unfortunately, Utah's doctors and hospitals are going to be shorted a lot of money," said former co-op founder and CEO Shaun Greene. "It didn't have to be that way."

Rural hospitals would be the most affected by the shortfall, Deseret News posited. Utah Hospital Association executive vice president David Gessel estimated that the association’s hospitals are owed somewhere between $8 million and $10 million in unpaid claims.

Former Arches executives commented that the agency rushed in its decision to close down the co-op, and that the liquidation process was mishandled.

Insurance department officials told Deseret News that they are doing the best they can to create a “soft landing” for the co-op after the federal government defaulted on an $11 million payment this summer. Despite reassurances, the department has confirmed that it likely cannot pay off all the claims until next year, 2017.

The department could use Arches’ $17.8 million in remaining assets to pay off a part of the $33 million, leaving a shortfall of around $15.2 million. Originally, the plan was to wait for additional federal payments to pay for the difference, but only recently has the department learned that no other federal imbursements would be made.

The alternative solution proposed was to use a provision in the law that allows the insurance department to assess the state’s seven other HMOs to pay for the shortfall. Utah insurance commissioner Todd Kiser believes that the assessment is the most “reasonable” and “responsible” thing to do to help the state’s medical providers, despite its apparent unpopularity.


Related stories:
Even worse coming for health insurance co-ops?
Co-op troubles continue as New England group halts policy sales