Health Republic Insurance of New York Co-Op to Close
Thousands of people will be without health insurance due to the liquidation of Health Republic, the largest of the nonprofit cooperatives created under the Obamacare’s Affordable Care Act, in the latest sign of the financial pressures facing many insurers that participated in the law’s new marketplaces. New York State regulators ordered the health-insurance co-op to close as it was in danger of becoming insolvent.
More than 200,000 people insured through Health Republic Insurance of New York have been affected.
This is part of a wave of failures of the new co-ops nationwide. In a statement, the Department of Financial Services said the Health Republic Insurance of New York co-op’s closure comes after an increasingly troubled financial situation.
“Given Health Republic’s financial situation, commencing an orderly wind down process before the upcoming open enrollment period is the best course of action to protect consumers,” said Anthony Albanese, the acting superintendent of the Financial Services Department, which oversees and regulates insurers in New York. “Moving forward, we will work closely with New York State of Health and federal regulators to help ensure continuity of coverage for Health Republic’s customers.”
The AP has reported that the closure of New York’s health co-op “has been a big hassle for Health Republic policyholders,” who have until Monday (12/1/15) “to sign up with another company if they want to maintain coverage in December.”
The situation “may be worse,” however, for physicians, hospitals, and other providers. They are obligated to continue treating Health Republic patients through the end of the month “but have been given no assurances they will ever be paid for that care.” Joseph Maldonado, MD, president of the Medical Society of the State of New York, said, “I’m aware of at least two physicians who have gotten checks from Health Republic, and those checks have bounced.” Dr. Maldonado also “said that if state officials want to count on the continued support of physicians for the health care overhaul, the government should step up and ‘make the providers whole.’” The AP adds that a survey of 800 physicians by MSSNY found that 43 percent were owed money by the insurer.
Many medical practices are presumably owed millions of dollars. A survey of 800 doctors by the medical society found that 43 percent were owed money by Health Republic. Nearly 8 percent of these medical professionals have reported that they are owed over $25,000. One practice of 22 physicians reported being owed more than $5 million..
Health Republic Insurance of New York was one of 23 nonprofit health cooperatives created nationwide by the Affordable Care Act and was the largest of those to fail. The companies, backed with $2.4 billion in taxpayer-financed loans, were supposed to be a lower cost alternative to the for profit insurers that dominate the marketplace.
In a statement by Health Republic, it said they were “deeply disappointed” by the outcome and pointed to “challenges placed on us by the structure of the CO-OP program.”