- Associated Press - Monday, August 3, 2015

PHOENIX (AP) - The nonprofit co-op health insurance plan created in Arizona to provide competition to traditional insurance companies under the Affordable Care Act has seen enrollment soar above projections after a dismal 2014 start that was highlighted in a recent federal audit.

The audit report released last week by the Health and Human Services Department’s inspector general showed Meritus insured only 869 people as of Dec. 31, just 4 percent of the target of nearly 24,000. That’s among the worst performers of co-ops operating in 23 states last year.

Meritus vice president Veronica Piotrowski disputed the enrollment figures in the federal government report, saying the company had 3,500 enrollees in November. The government stands by its numbers.

Regardless, she said enrollment has since soared and the insurer now covers nearly 56,000 Arizonans. Most of those bought their policies on the federal health insurance marketplace, boosting Meritus’ marketplace share from less than 2 percent last year to 28 percent now.

A March report from the Government Accountability Office said most co-op plans with lower-than-expected enrollment blamed high premiums for their performance, and its analysis showed Meritus insurance plans last year were among the most expensive sold in the state.



Piotrowski also blamed the poor start on the uncertainly with the federal government’s health insurance exchange and the public’s unfamiliarity with the company, created using a $93 million federal loan. Most of that loan was used to created reserves.

The company lowered prices on many plans for this year’s open enrollment period and it is now more well-known, she said.

“We really felt that as we progressed that we had a product that was more widely known, Meritus was becoming more familiar to the community,” she said. “And we have attractive pricing. That was also part of that recipe that really made us an attractive and valuable selection for the community.”

The Tempe-based company offers HMO and PPO plans on the federal marketplace and in the private market. Its plans include so-called “narrow networks” with limited providers and broad networks with large choices among hospitals and doctors.

According to enrollment numbers provided by the Arizona Department of Insurance, Meritus had only 2 percent of the market last year, based on its enrollment and nearly 100,000 plans sold on the federal exchange. Based on numbers Piotrowski provided Friday, that has soared to nearly 30 percent of the 165,000 people who bought marketplace plans for 2015.

“I think the story is we’ve more than doubled even what that projection was,” she said. “We’ve exceeded our targets through this part of the year as well, so we’re really pleased with that.”

The federal audit showed Meritus lost $7.2 million last year, but projected a small profit this year and earnings of $3 million in 2016.

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Associated Press writer Ricardo Alonso-Zaldivar contributed from Washington.

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