Evergreen Health in Maryland, which was among 23 co-ops set up under the Affordable Care Act, is being liquidated due to financial insolvency, according to an order from the Circuit Court in Baltimore.
The court directed four HMO plans to offer Evergreen's 25,000 members a 30-day open enrollment period. The insurers taking on the co-op's members as of Sept. 1 are CareFirst BlueChoice, Kaiser Foundation Health Plan of the Mid-Atlantic States, Aetna and Optimum Choice.
Most of the ACA's consumer oriented and operated health plans have failed financially, with four reportedly still in business at the start of this year.
To stay solvent, Evergreen sought to switch from a nonprofit to a for-profit insurer. In May, Evergreen had as prospective investors JARS Health Investments, Anne Arundel Health System, and LBH Evergreen Holdings - LifeBridge Health.
But in July, the private investors informed the Insurance Administration they were terminating the process.
Maryland Insurance Commissioner Al Redmer Jr. issued an order prohibiting Evergreen from transferring any assets without prior approval or from selling or renewing insurance policies, a preliminary step to receivership.
"The Maryland Insurance Administration took all possible steps to keep Evergreen in the market," Redmer said. "Unfortunately, the company's financially hazardous condition and the failure of the acquisition to close necessitated regulatory action on our part."
Evergreen had two large bills to pay.
In January, the Centers for Medicare and Medicaid Services released Evergreen from the co-op program but ordered it repay $3.2 million of its $65 million startup loan and forfeit $30 million it was due from another federal program, according to the Baltimore Sun. The year before, Evergreen was required to pay $24 million under the ACA's risk adjustment program.
Evergreen's policies will be cancelled effective September 30. The court ordered receiver Risk & Regulatory Consulting to pay payroll, expenses and all reasonable claims.