State and federal regulators have ordered Health Republic Insurance of New York to stop writing new health insurance policies.
The New York State Department of Financial Services, the New York State of Health public exchange program and the Centers for Medicare & Medicaid Services (CMS) said in a joint announcement that Health Republic, a nonprofit, member-owned insurer, will “commence an orderly wind down after the expiration of its existing policies.”
Existing individual policies will stay in effect until the end of the year.
The status of Health Republic’s small-group plans will depend on “Health Republic’s ongoing financial results,” CMS and New York officials said in the announcement.
“Any future determinations made on small group plans will be announced with appropriate notice to help provide a transition period to new coverage and protect policyholders,” CMS and New York officials said.
Kevin Counihan, head of the public exchange program at CMS, said in a statement included in the announcement that CMS agreed with New York regulators that it was in the best interest of Health Republic policyholders for the company to wind down its operations “because of the likelihood that Health Republic Insurance of New York would become financially insolvent.”
Health care providers “are required under the terms of their contracts to continue delivering care to Health Republic customers,” CMS and New York officials said.
Officials did not say whether provider reimbursement levels or other terms might change as a result of the decision to have Health Republic wind down its operations. The shutdown announcement included no mention of agents or brokers.
Health Republic said in a statement of its own that it will continue to process all enrollee medical claims through the end of the year.
“While we are deeply disappointed with this outcome, we believe it is in the best interests of our members,” the CO-OP said. “As a nonprofit CO-OP, our members and their families are at the heart of every decision that we make.”
New York state health care access activists started Health Republic of New York in 2014, using startup loan money from the Patient Protection and Affordable Care Act (PPACA) Consumer Operated and Oriented Plan (CO-OP) program.
The CO-OP used low premiums to get consumers’ attention.
See also: Low-cost CO-OPs win share
Analysts at the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) reported earlier this year that the New York CO-OP did better than any other PPACA CO-OP at selling policies during the 2014 open enrollment period.