Arkansas Medicare Part D pharmacy benefits insurer Indy Health Insurance Co. (IHIC) has been placed under an order of rehabilitation by a circuit court in Pulaski County effective March 18.
IHIC is an Arkansas domiciled company that provides Medicare Part D plans in Arkansas, Pennsylvania, West Virginia, Illinois, and Georgia.
An order was issued after Arkansas Insurance Commissioner Alan McClain filed a petition for the appointment of a receiver for rehabilitation on Tuesday, March 16. After experiencing significant unfavorable claims development during the first quarter of 2021, IHIC was unable to provide regulators with a viable plan to address the unexpected losses. After review and consideration of all available options, IHIC’s board of directors adopted a resolution voluntarily consenting to the entry of an order of rehabilitation.
The immediate focus for regulators has now shifted to ensuring IHIC’s Medicare Part D beneficiaries obtain a new plan and that all outstanding claims are settled. Plan members in the impacted states will receive notification from the Centers for Medicare and Medicaid Services (CMS) in the coming days with information on the process for signing up for another Part D plan in their area.
“As Insurance Commissioner, my first priority is to protect consumers,” Arkansas Insurance Commissioner Alan McClain said in a news release Friday (March 19). “And to do this, I must ensure all insurance companies are adhering to the law, operating with financial integrity, and delivering on their promises to consumers.”
As the appointed Receiver of the Company, McClain and his appointed Deputy Receiver, Steve Uhrynowycz, will be working with Company management, CMS, and the Court to determine the most efficient means for continuing Plan D Medicare services to the enrollees under the Company’s plan. The Arkansas Insurance Department (AID) will work with the Deputy Receiver, as well as the Company’s management and CMS, under the direction of the Court, to provide the most comfortable and expedient transition to a new prescription drug plan regulated by CMS.
The Liquidation Division at AID administers the rehabilitation or liquidation of insolvent insurance companies. In certain circumstances, when an insurance company is in financial trouble and there is the possibility that claims will not be paid because the assets may not be sufficient to meet policyholder obligations, the Insurance Department will step in to rehabilitate the company and return it to financial health, or if rehabilitation is not possible, liquidate an insolvent company for the benefit of policyholder, creditors, and taxpayers.