Health providers to receive $10M to help unpaid claims

Portrait of a young couple calculating finance at desk

SALT LAKE CITY (AP) — The Utah Insurance Department will pay $10 million to health providers to cover debts left behind by an insurance company that was created to offer plans under President Obama’s Affordable Care Act but closed its doors in 2015.

The amount will be paid over the next six months to help diminish the debt of unpaid claims from Arches Health Plan.

The payments are a fraction of the more than $36 million owed to those service providers by the health co-op, Assistant Department Commissioner Tanji Northrup said. That number could still rise as straggler claims continue to trickle in, Northrup said.

That total is in addition to another $90 million the defunct co-op owed the federal government, as well as $2 million in unpaid debts to insurance agents and unpaid advertising costs, Northrup reported to the Health Reform Task Force of the Utah Legislature last week.

The money owed to the federal government was a startup loan of $10 million and a solvency loan of $80 million, the Deseret News reported ( ).

Arches announced in October 2015 it would no longer be able to offer health insurance beginning in January 2016. The announcement meant 45,000 Utah residents would no longer be covered beginning that January and would need to explore other options for their health insurance.

Arches at the time cited unsustainable financial pressure caused by an extreme shortfall in expected funding from the Affordable Care Act’s risk corridor, a funding source that the law intended to use to make up for unpredictable shortfalls for some insurers.

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