Health Republic Insurance co-op ordered to close over financial losses
Company represents the fourth co-op to close in recent months.
Due to concerns of insolvency, federal and state officials have ordered the nonprofit co-op Health Republic Insurance of New York to cease writing policies and to close by the end of the year.
The New York State Department of Financial Services, the Centers for Medicare and Medicaid Services and the New York State of Health issued the mandate on September 25, ahead of the November 1 open enrollment period, to give beneficiaries time to find new plans, according to the released statement from the Department of Financial Services.
Providers are required under the terms of their contracts to continue delivering care to Health Republic customers, according to officials.
[Also: Most co-op exchange health plans losing money, OIG report says]
The news is a blow to one of the largest nonprofit co-ops in the country, among many formed out of Affordable Care Act initiatives to offer alternatives to the large insurance plans. However, the financial funds promised in the ACA have been cut amid squabbles in Congress, according to published sources.
Health Republic represents the fourth co-op to close in recent months, according to The Washington Post.
In a letter to members, Health Republic CEO Debra Friedman said the government was to blame.
"Starting a new insurance company is a daunting task in any environment, but the systemic challenges placed on us by the structure of the CO-OP program were simply too difficult to overcome," Friedman said in the letter.
Existing individual Health Republic insurance policies will remain in effect through the end of the year, according to the Department of Financial Services.
A total of 16 health insurers are expected to offer individual coverage for 2016 on New York State of Health.
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Existing Health Republic small group plans – which, unlike individual plans, do not all have calendar-year policy terms – also remain in effect. Regulators said they would evaluate the best course of action for these plans and make a future determination based on Health Republic's ongoing financial results.
"Because of the likelihood that Health Republic Insurance of New York would become financially insolvent, (federal and state regulators) agreed that it was in the best interest of HRINY policyholders and the overall health of New York Marketplace to wind down operations of HRINY at the end of 2015 and allow consumers to smoothly transition to a new plan during Open Enrollment, beginning November 1, "said CMS Marketplace CEO and Director Kevin Counihan.
Twitter: @SusanJMorse
