16,000 Medicare Advantage and Part D enrollees forced to leave failed plan
10/18/2011
Quality Health Plans, Inc., based in Tampa, Florida was placed into receivership on October 17 following the
suspension in May of marketing and enrollment for its two Medicare Advantage plans and a prescription drug plan.
The suspension related to the discovery that, among other administrative failures, the company had failed to invoice
its members for premiums for three years. This led to invoicing for a lump sum that was required to be paid
immediately and with no alternative arrangements.
Weiss had identified the company as “Very Weak” more than five years ago with low capital, profitability,
and liquidity ratios together with minimal risk-adjusted capital ratios demonstrating an inability to cover incurred
losses. At the end of first quarter 2011, the insurer had no capital remaining and an inability to continue
marketing. Failure was only a matter of time.
Ranked the 28th largest provider in Florida, the company had just over 16,000 enrollees that will be looking
for a new provider through December 7 when the annual open enrollment period ends. The company had a Weiss
Financial Strength Rating of E+ (“Very Weak”) at the time of failure.
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