Colorado insurance officials yesterday announced that despite their best efforts, they cannot keep troubled insurtech Friday Health Plans afloat until the end of the year and will instead liquidate the company on Aug. 31.
State officials put Friday Health Plans into receivership on June 21 in the hope that their oversight of the company’s finances would allow the approximately 35,000 enrollees in the state keep their coverage until the end of the year, but it was not to be. Officials hoped that keeping the company afloat over the next several months would help members avoid restarting deductibles and out-of-pocket costs.
Colorado Insurance Commissioner Michael Conway said in the press release that “diving deeper into Friday’s finances after putting the company into rehabilitation, the Division became concerned about its ability to make it through the rest of the year.”
Kaiser Permanente stepped into the breach, according to the announcement, agreeing to honor Friday enrollees’ deductibles and out-of-pocket accumulations, and state regulators calculate that 85% of Friday enrollees have access to a Kaiser plan.
Anthem Blue Cross Blue Shield, Cigna and Rocky Mountain Health Plans said they will not honor what Friday members have paid so far in deductibles and out-of-pocket costs, according to the announcement. Denver Health has not yet reached a decision.
Conway also said some providers are refusing to see and treat Friday enrollees.
“It’s especially concerning because of the Division’s efforts to make sure Friday Health became a member of the Colorado Guaranty Association in order to, in part, protect providers,” Conway said.
Friday enrollees can begin enrolling in other health plans immediately. Those who enroll after Aug. 31 will have coverage at the start of the month after they enroll: For instance, individuals who enroll sometime in October will begin having coverage Nov. 1.
Ari Gottlieb, principal at A2 Strategy Group, told Fierce Healthcare that the news "is not surprising.” He praised Colorado’s insurance officials for trying to keep Friday functioning.
“They really wanted to try and make this work," he said. "They wanted to try and hold out for the rest of the year to minimize the disruption to members. They’re making a prudent decision, even though it will have a negative impact on policyholders.”
Gottlieb called Kaiser Permanente’s decision to honor Friday members' deductibles and out-of-pocket accumulations a “big win” for Colorado health insurance officials and an altruistic move by the health plan. The healthcare giant is "obviously making a decision to potentially forego profitability to help,” said Gottlieb.
Of the seven states Friday operated in, it’s still running only in Nevada, where it has 2,000 members. Gottlieb said Nevada is also weighing its options and may make an announcement later this week.
When Colorado put Friday into receivership last month, Conway asked for the continued cooperation by the insurtech’s management “to avoid policyholder disruption both in Colorado and in other states to the greatest extent possible.”
Conway also said last month that “healthcare providers can expect to still be paid for their services in accordance with the contracts they have with Friday Health.” Conway will have the “authority to take any necessary actions to protect policyholders, creditors, claimants and the public.”
Yesterday’s announcement that state insurance regulators will help Friday enrollees recover from Friday’s remaining assets “any deductibles, out-of-pocket maximums or other cost shares members will pay only because they moved to a new plan.”
Providers should be paid according to their contracted amounts to treat Friday members through Aug. 31. The announcement said Friday members should contact the Division of Insurance if a provider wants them to pay more than the usual amount for deductibles, copayments or coinsurance.