The shutdown of a struggling health plan in South Carolina may offer some clues about what agents and brokers can expect if other health plans shut down in the future.
See also: What happens if health insurers fail?
Raymond Farmer, the state’s insurance director and the plan’s rehabilitator, gives some information about the problems South Carolina Health Cooperative Inc. faced in a motion asking a state court in Richland, S.C., for approval of a plan for winding down the plan’s affairs.
The multiple employer welfare arrangement (MEWA) covered about 4,600 employees at 500 member employers when it failed, Farmer says in a copy of the motion posted on the South Carolina Department of Insurance website.
When the MEWA suspended operations, it had about $11 million in unpaid provider liabilities, or about $2,400 in unpaid claims per enrollee.
Enrollees in another carrier that failed recently, CoOportunity Health, had about $80 million in unpaid claims and 100,000 enrollees in Iowa and Nebraska, or about $800 in unpaid claims per enrollee, when it failed.
The enrollees in that nonprofit, member-owned Patient Protection and Affordable Care Act (PPACA) cooperative plan were eligible for state guaranty association help when their plan failed.