In a not so shocking announcement, and by order of the New York State Department of Financial Services, Health Republic has ceased writing new individual and small group policies effective immediately due to carrier insolvency. This will be followed by a complete shut down of the carrier as all existing policy contracts expire, which presumably will be on or around October 1st, 2016 (at the latest) for small groups. No new individual policies will be written for the 2016 open enrollment season, which means all existing individual Health Republic plans will terminate on January 1st 2016.
Since Health Republic of New York launched on January 1st 2014, customers of the carrier have experienced two large year-over-year rate increases. For 2016, their rates were to go up by an average of 20% across small groups, and 14% for individuals. When you consider many businesses moved to Health Republic coverage as a means to cut down costs from other carriers like Oxford and Aetna, there was no way Health Republic would be able to compete moving forward, to say nothing of being unable to satisfy claims had the carrier been allowed to continue operating.
Health Republic, a “Co-Op” non-profit insurer, was established by the federal government via Obamacare as a means to create competition in the health insurance marketplace. There were approximately 23 Co-Ops across the US that launched on January 1st 2014, which collectively received $2.4 billion ($265 million to Health Republic) in federally funded loans to get started. By Q4/2014, all but one Co-Op had reported heavy losses and since then, four Co-Op insurer’s have shut down due to insolvency. Additionally, federal health officials have said that other Co-Op’s could be closing in the near future.
The good news is, there are plenty of other carrier options to choose from in the downstate New York private insurance market. To name a few, they are LIJ CareConnect, Emblem, Empire, Oxford, and Aetna.
The time is now to start preparing to move your health insurance to another carrier. For more information, contact an insurance broker.