The New York State Department of Financial Services (NYDFS), the Centers for Medicare and Medicaid Services (CMS), and the New York State of Health (NYSOH) health plan marketplace have announced in a press release issued by the NYDFS that they are directing the Health Republic Insurance of New York co-op to cease writing new health insurance policies and to wind down after the expiration of its existing policies.
The plan to shut down the Health Republic was due to the insurance company's likelihood to be financially insolvent.
The Wall Street Journal reports that regulatory filings say Health Republic has already lost about $52.7 million in the first six months of 2015.
This is on top of the $77.5 million loss it already incurred in 2014.
Anthony J. Albanese, the acting superintendent of Financial Services, said in the press release that this is the best course of action to take.
"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," he said.
Kevin Counihan, the director & marketplace CEO at CMS, also said in the press release that it is in the best interest of policyholders of the Health Republic and the overall health of the New York Marketplace for the company to wind down.
"CMS' priority is to make sure that consumers have access to quality, affordable coverage through the Marketplaces," he said.
The Wall Street Journal adds that Health Republic is the fourth among the 23 original co-ops of ACA to falter.
This reflects the losses in many insurers' business that is related to the health law's exchanges.
"While we are deeply disappointed with this outcome, we believe it is in the best interests of our members," Debra Friedman, CEO of Health Republic, said in a statement.
"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," she adds.
Health Republic's existing insurance policies will remain in effect through the end of their policy terms on December 31, 2015, according to the press release.
For existing policyholders of Health Republic's insurance, who wants more information, please visit this site.
