New York: Health Republic 4th ACA Co-Op to close down
Among the various provisions of the Affordable Care Act, the one which intrigued me the most was the creation of 23 "Consumer Operated and Oriented Plans", or "CO-OPs". The idea was to create non-profit quasi-public/private healthcare insurance organizations (similar in nature, I believe, to Credit Unions, except for health insurance), to compete with the private, profit-based insurance providers.
Unfortunately, as the Office of the Inspector General noted in a July report (in huge font size for some reason), after two Open Enrollment periods have come and gone, the ACA CO-OPs aren't doing very well for the most part, to put it mildly.
One of them, CoOportunity of Iowa and Nebraska, infamously melted down before the 2nd OE period was even halfway done.
Today comes news that a fourth one is biting the dust as well:
A nonprofit insurer born out of Obamacare is being shut down by state insurance regulators and the federal government.
Health Republic Insurance was ordered by the New York State Department of Financial Services, the Centers for Medicare and Medicaid Service, and the state's Obamacare exchange, the New York State of Health, to stop writing new policies and wind down its existing policies once they expire. Those policies will be in effect through Dec. 31.
Manhattan-based Health Republic was New York's only co-op insurer, a new model created under Obamacare. The federal government provided some two dozen co-ops with loans to help them establish new consumer-governed, nonprofit health insurers.
DFS made the announcement before the new open-enrollment period begins for the insurance exchange on Nov. 1.
The article claims that NY's Health Republic has 200,000 enrollees, but according to the official state regulatory agency, they only had about 166,000 people actively enrolled in effectuated policies as of this summer, 79,000 of which are in small group policies.
The silver lining here is that unlike some states, New York has over a dozen other insurance carriers operating on (or off of) the exchange, so there's plenty of options for the existing enrollees.
Of the 19 remaining ACA Co-Ops, two of them are actually doing just fine:
- Community Health Options (operating in Maine and New Hampshire) is doing very well.
- Consumers Choice Health Plan (operating in South Carolina) at least "exceeded their enrollment and profitability projections as of December 31, 2014", though I don't know how they're doing this year.
The other 17 Co-Ops are in various degrees of financial trouble.