Dive Brief:
- Colorado is moving to liquidate Friday Health Plans, becoming the latest state to shut down the insurtech as it winds down operations nationwide.
- The state had hoped the insurer had enough cash to operate for the rest of the year after Friday announced it would shut down earlier this summer. But, after Colorado took control of the health plan in June, more detailed financial analysis revealed the insurer might not make it to the end of 2023, and could cause confusion for members trying to enroll in coverage next year, according to the Colorado Division of Insurance. Now, Friday’s plans will terminate on Aug. 31.
- Friday, which launched in 2015, aimed to offer a “simpler” experience for people buying coverage on the Affordable Care Act exchanges. In a statement announcing the plan’s closure, Friday said it had become unable to scale its financial infrastructure or raise more capital to fund its business.
Dive Insight:
Friday previously operated in seven states, but state regulators have made moves this year to take control of the insurer and wind down operations after the company struggled financially.
Colorado joined other states like Nevada and North Carolina last month when it announced it would take control of the failing insurtech. Texas placed the insurer into receivership in March, appointing a trustee to manage operations at the struggling company, and ordered its liquidation.
When the insurtech announced plans to shut down in June, Colorado Insurance Commissioner Michael Conway initially said Friday had enough capital to continue operating in the state for the remainder of the year.
But, after analyzing the insurer’s financial documents, the Colorado Division of Insurance determined the insurer might not be able to operate for the duration of 2023.
In addition to concerns about its financial performance, there were “dozens” of claims that providers in the state had begun to refuse to see Friday beneficiaries over concerns they might not be paid by Friday, according to the Colorado Sun.
As a result, on Monday, regulators announced Friday plans will terminate on August 31, leaving 30,000 Coloradans a little over a month to find a new plan or risk going uninsured, reports the Colorado Sun.
In a statement issued Monday, Conway said he was shutting down Friday plans to protect Coloradans, those enrolled in Friday and the 2024 open enrollment process.
“Yet, as we work to protect people, I am disappointed that some health care providers are refusing to see Friday members and provide treatment,” Conway added.
The state opened a special enrollment period for current members that runs through Oct. 31.
