This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Arches Health Plan is about $15 million in the red after the membership cooperative was forced out of the 2016 insurance market last year.
That means its doctors, pharmacies and other health care providers, as well as its creditors, cannot be paid right now.
Tanji Northrup, assistant insurance commissioner for the state Insurance Department, said she doesn't believe any claims have been paid to providers since mid-December.
At a Thursday meeting of the Health Reform Task Force, Northrup said the company's computer system will not allow it to process reduced or partial claims, and the company said it would cost more than $15 per claim to manually reprocess them.
All claims will be cut off in July.
The department put the company in receivership meaning it's overseeing Arches' termination of insurance plans last year after the co-op was unable to raise the cash needed to assure regulators that it would be solvent enough to handle claims through 2016.
Northrup said the department was able to move all individuals on Arches health plans to other plans effective Jan. 1 and all Arches policyholders were terminated as of Jan. 31.
The Centers for Medicare and Medicaid Services notified insurers in October that because Congress had put new restrictions on the program designed to cushion insurers' losses, it could cover just 12.6 percent of their losses.
Because of this, Arches didn't get $8.7 million from the feds that it was expecting last year.
The company hopes to receive a $9 million reinsurance payment in August based on claims in its 2015 policies, Northrup said, which is crucial to help pay its creditors.
Northrup also said 2014 risk corridor payments could come through and help pay their claims in full.
It's not clear, however, when or if that money will come through. If it doesn't, the department might have to rely on local health maintenance organizations to cover the shortfall.