The California Department of Managed Health Care has issued a cease-and-desist order against Meritage Health Plan, effectively shutting down the Medicare Advantage insurer by the end of October.
The Aug. 27 order requires six health plans (Alignment Health, Humana, SCAN Health Plan, Molina, Centene’s Health Net and UnitedHealthcare) to terminate their contracts with Meritage and reassign nearly 11,000 MA enrollees by Oct. 31.
The move follows a Jan. 27 order from the state that had already prohibited plans from sending new members to Meritage after it failed to meet state financial solvency requirements last year.
Meritage Health Plan is part of Oakland-based Meritage Medical Network, an independent practice association of about 2,100 physicians across Northern California and the Central Valley. Meritage contracts with MA insurers to take on risk and manage care for its members.
Meritage has reported successive net equity shortfalls that widened to almost $6 million by the first quarter of 2025. As of March 31, the plan reported a net worth of $425,972 against liabilities exceeding $18 million. Regulators determined these deficiencies created “a critical and imminent risk” to Meritage’s ability to provide care to its enrollees.
Health plans with contracts tied to Meritage had to file action plans with the state by Sept. 15, detailing how they will unwind agreements and ensure continuity of care during the transition.
