Imagine waking up one morning to discover you no longer have health insurance. The reason for the sudden lack of health insurance coverage is not because your policy expired or you failed to make a monthly premium payment. Instead, the reason for the expiration of your health insurance coverage concerns Friday Health Plans shutting down its operations. According to a company statement, the refusal of investors to invest more money into a failed business model forced financially troubled Friday Health Plans to close its doors.
“Unfortunately, Friday has been unable to scale our financial infrastructure to match the pace of our growth and secure the additional capital required to run our business,” the statement said. “While we are deeply disappointed, we agree with the decision of our state regulators that it is necessary to wind down Friday’s business operations over time in accordance with the regulations in the states where we are operating.”
States Take Action
One health insurance industry analyst stated states have taken actions to address the financial woes of Friday Health Plans. Georgia government officials reported the state has placed Friday Health Plans into receivership due to the company’s financial problems. The state also informed nearly 40,000 policyholders that they have until August 1 to find another health insurance plan. Across the country in Nevada, government officials announced that they also plan to place Friday Health Plans into receivership. Scott Kipper, who is the Nevada Insurance Commissioner, said in a press release that “the primary responsibility of the Division of Insurance is to protect the consumers of the state. Through this receivership, we can further evaluate the health of the company and determine how to best serve the interests of Nevadans.”
Insurance regulators in states such as Colorado, North Carolina, and Texas have prohibited Friday Health Plans from enrolling additional policyholders. The decisions made by several states have forced Friday Health Plans to throw in the towel by taking steps to shut down operations. The company also said in its statement that its “top priority is to ensure that your access to benefits is uninterrupted during this process.”
How insurance officials in each of the impacted states shut down Friday’s Health Plans should influence the operations of other health insurance companies operating in the same states. One negative consequence of forcing Friday’s Health Plans to shut down is that the estimated 125,000 affected policyholders might have to pay an annual deductible two times in one year. Scott Gottlieb, a principal at A2 Strategy Group, says not every state will take the same approach to address Friday Health Plans as did Georgia and Nevada. However, Gottlieb emphasized many states seem to be following the same approach as Georgia and Nevada. “They ( the states) clearly coordinate so it’s not surprising that Nevada and Georgia took action within 24 hours,” said Gottlieb.
In the state where Friday has established its headquarters, Colorado issued a press release stating that the state expects to wait until the end of 2023 to diminish and eventually eliminate Friday’s presence. However, Gottlieb doubts Friday Health Plans can hold on until December 31, citing insufficient capital and a dramatic decline in the number of policyholders. Gottlieb said, “The right thing for Colorado to do would be to follow Georgia’s example and take over the plan and then shut it down. They are basically hoping the math works and vendors continue to service the plan, even when they are potentially not getting paid.”
If states such as Oklahoma and North Carolina follow the example set by Georgia and Nevada, Friday Health Plans must find a way to increase sales from a Colorado-only policyholder base of just 35,000 members.
Online Statement From Friday Health Plans
Here is the full statement from Friday Health Plans:
“Friday Health Plans has grown incredibly quickly, which is a testament to the strength of our mission of delivering affordability, simplicity, and outstanding customer service. Unfortunately, Friday has been unable to scale our financial infrastructure to match the pace of our growth and secure the additional capital required to run our business. While we are deeply disappointed, we agree with the decision of our State regulators that it is necessary to wind down Friday’s business operations over time in accordance with the regulations in the states where we are operating. We believe this action is in the best interest of our members. We deeply appreciate our employees for all their hard work and dedication to Friday and are grateful for their support as we manage this process.”
Find a New Heath Insurance Plan with Insurance Broker Hub
If you find yourself without health insurance as the result of the Friday Health Plans’ imminent closure, consider shopping for a new policy at Insurance Broker Hub. We are an independent national insurance broker network that provides consumers with full access to every carrier in the industry. Our no-obligation insurance broker service can help you find the right policy that is tailor-made for your budget and healthcare needs.
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