The nonprofit cooperative has now collapsed and has left hospitals without millions in payments.
Arches Mutual Insurance Co, a nonprofit Utah insurance co-op, has now collapsed. As a result, there are millions of dollars worth of unpaid claims. This could leave hospitals without a massive number of payments.
The Utah Department of Insurance said the not for profit cooperative will likely not pay its debts until next year.
Despite the fact that Arches Mutual Insurance still owes hospitals $33 million, this debt won’t be paid soon. The Utah Department Insurance stated that it will be 2017 before the payments start being made. Officials who worked at the Utah insurance co-op feel the closure decision came about too hastily. Moreover, the officials also said the liquidation process is not going well. They feel there is a mismanagement of this process.
The Utah insurance co-op former officials claim that many upcoming problems could have been prevented.
CEO and Founder at Arches, Shaun Greene, said “Unfortunately, Utah’s doctors and hospitals are going to be shorted a lot of money.” Greene also added that “It didn’t have to be that way.”
Among the problems was the result of a stabilization fund. That stabilization fund was established under the health care reforms in the state. Unfortunately, it brought in less money than predicted. By October 2015, they announced that Utah insurance companies would receive much less than requested. In fact, those insurance providers received only around 13 percent of the amount they’d initially asked for.
Utah Insurance Commissioner Todd Kiser conducted an analysis based on those figures. What he found was that Arches was not able to withstand that financial blow.
Conversely, Greene stated that the Utah insurance co-op would have been capable of continuing to serve its policyholders. This included three school districts who were among the policyholders at the insurance cooperative. Greene felt the co-op could have provided the necessary service until the end of the existing contracts. However, he also said that Utah insurance regulators scared their policyholders away. Had they held on to those customers, they would have more funds available to pay the hospitals, said Greene.