Facing insolvency, the co-op health insurance plan operating under the state's Obamacare health exchange is being shut down.
Health Republic Insurance of New York will cover existing policies through the end of the year, and the approximately 200,000 New Yorkers enrolled in the plan are being told to start shopping among the other 16 insurance companies still offering coverage through the state health exchange.
"Given Health Republic's financial situation, commencing an orderly wind-down process before the upcoming open enrollment period is the best course of action," Anthony Albanese, acting superintendent of financial services, said in a statement Friday afternoon announcing the closure.
Joining the closure order was the federal Centers for Medicare and Medicaid Services.
The co-op was ordered to stop writing new policies immediately.
The closure is unlikely to have a big effect in the Capital Region because New York City-based Health Republic had earlier said it was pulling out of several counties in the area in an effort to consolidate. The co-op also had a relatively small network of Capital Region hospitals and doctors that participated in its plan.
"There are certainly plenty of alternatives in the Capital Region," said Leslie Moran, senior vice president at the NY Health Plan Association, a trade group of insurers.
The co-op appears to be suffering the same fate as several other such operations nationwide.
Using federal seed money, Obamacare envisioned allowing co-ops, or non-profit organizations similar to mutual insurance firms or credit unions, to compete in state-run health exchanges, or marketplaces for affordable health insurance.
The idea was they could keep costs down and eventually be governed by their own members.
But some lacked the marketing expertise and didn't necessarily have the actuarial data, or projections about costs, that established health insurance plans had when they entered the exchanges.
Earlier this year, for example, a co-op that had become popular in Iowa and Nebraska for its low rates hit the rocks financially because its insurance payouts were higher than anticipated.
And in August, a Nevada health exchange co-op was forced to close as enrollments were too low and the payouts on claims too high.
On the other hand, a co-op in Arizona was reportedly growing rapidly.
In New York, co-op customers can get more information through a Department of Financial Services consumer help line at (800) 342-3736. Starting Saturday, the help line will have extended hours operating Monday through Friday from 8 a.m. to 8 p.m. and on Saturday from 9 a.m. to 1 p.m.
(c)2015 the Times Union (Albany, N.Y.)