New York to Shut Down Obamacare Insurer Health Republic

New York State authorities have ordered Health Republic Insurance of New York, a nonprofit insurance cooperative, to stop writing new policies and wind down business after existing policies expire, citing the likelihood that the cooperative would become financially insolvent.

The New York Department of Financial Services said on Sept. 25 that current individual coverage should continue through Dec. 31 for 108,000 people, most of whom signed up through New York’s health exchange.

The agency and the State Health Department said existing small group plans also remained in effect, covering an additional 101,500 people. Most of those policies were bought outside the exchange established under the Affordable Care Act.

The agencies said they would evaluate how to proceed with those policies based on Health Republic’s continuing financial results.

Medical providers are required by contracts to keep seeing Health Republic’s insurance customers, the state agencies said. An additional 16 insurers are expected to offer coverage next year on the state’s health exchange.

Health Republic, which opened in October 2013, said it would keep processing all claims through the end of the year.

“Starting a new insurance company is a daunting task in any environment,” it said, adding that the structure of the cooperative program enacted by Congress involved challenges “too difficult to overcome.”

Anthony Albanese, the superintendent of the financial services agency, said, “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.”

Other nonprofit cooperatives in Iowa, Louisiana and Nevada have run into similar trouble, according to federal officials.