State puts Friday Health Plans into liquidation, consumers to lose insurance August 31

The Colorado Division of Insurance on Monday announced that it is joining four other states to liquidate Friday Health Plans.

The liquidation is raising concerns that some health care providers may stop seeing patients enrolled in Friday before the insurance company shuts down.

That means about 30,000 Coloradans enrolled in Friday Health Plans will lose their health insurance sooner than anticipated and will have to find another plan by the end of August. For some, it could also mean they will have to restart the clock on deductibles and out-of-pocket maximums.

Most of the Coloradans enrolled in Friday's HMO are in the individual market.

The insurance division said it has asked the courts to put Friday into liquidation, with health plans terminating as of Aug. 31, 2023.

"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," Commissioner of Insurance Michael Conway said. "As a result, I am taking this step to protect Coloradans and the people enrolled in Friday, and to protect the open enrollment process for 2024."

Conway added he is "disappointed that some health care providers are refusing to see Friday members and provide treatment."

He added: "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."

On June 21, the division put Friday Plans of Colorado into rehabilitation, a form of receivership it hoped would allow the company to continue operating through the end of the 2023 plan year. The division halted enrollment in Friday plans in May. At about the same time, Gov. Jared Polis signed legislation that would add protections for providers and consumers enrolled in HMOs, such as Friday, up to a statutory cap of $500,000 for each insured member.

DOI said a review of the company's financial projections raised "significant concerns" about the accuracy of those projections.

Once the company was put into rehabilitation, DOI said, those projections deteriorated even further, and the parent company decided to shut down operations on July 6, instead of working through a measured winding down of its business, which DOI said increased costs for the Colorado affiliate.

"Friday's problems are national — the company's aggressive growth in other states around the country got ahead of their financing," the division said last June.

The decision to seek liquidation triggered the action provided under HB 1303 by the Colorado Insurance Guaranty Association to pay claims from doctors, hospitals and other health care providers for services to Friday enrollees, pursuant to the contractual terms with the company. The association will pay up to $500,000 — the statutory limit — for claims for each person covered by Friday, DOI said in a statement.

For consumers enrolled in Friday plans, a special enrollment period started on Monday and will run through Oct. 31. Those who enroll prior to Aug. 31 will have new health insurance coverage starting Sept. 1. For those who enroll after Sept. 1, coverage will begin on the first of the following month.

Small business members enrolled in Friday's group plans should contact their insurance brokers about how to choose a new plan for employees, the division said.

The division has also asked other insurance companies in Colorado to honor the deductibles and out-of-pocket maximums that Friday members had already paid in 2023.

So far, Kaiser has agreed to honor that request, and the division said 85% of Friday enrollees have access to a Kaiser plan.

Denver Health has not made a decision on whether to honor those deductibles. Anthem, Cigna and Rocky Mountain Health Plans have all announced they will not honor that request, so people switching from Friday to one of those plans will have to start over with deductibles and out-of-pocket maximums for 2023.

The other states liquidating their Friday Health Plan affiliates are Texas, Georgia, Oklahoma and North Carolina.

Saskia Young, executive director of the Colorado Association of Health Plans, said Tuesday that "carriers are working hard to create a seamless transition for Friday members to new health insurance plans so that their care is not interrupted."

"We do, however, remain concerned about the long-term impacts to the Colorado health insurance market for consumers and the ability of carriers to meet premium reduction targets given this unfortunate occurrence," Young said. "We appreciate the work of the Division of Insurance to navigate the situation and continue to reiterate the importance of ensuring that premium rates for 2024 are adequate given this latest upheaval in Colorado's insurance market."

Friday Health Plans of Colorado is the fourth in the past year to announce it is leaving the Colorado market, following similar decisions by Bright Health, Humana and Oscar Health. Collectively, the four companies enrolled about 219,000 Coloradans.