Obamacare's Biggest Government-Backed Non-Profit Insurer Is Shutting Down
New York's Health Republic signed up more people than any of the health law's other co-ops. It's still shutting down.
More bad news for Obamacare's health insurance co-ops: New York state's Health Republic, which, with about 200,000 members, was the largest of the non-profit health insurers set up under the law, announced last week that it will stop writing policies at the end of the year.
Effectively, it's shutting down.
The shut down comes at the behest of both state overseers and federal health officials, which concluded that the insurer, which was founded with backing from federal loans made available under the president's health law, didn't have any plausible path to financial stability.
Despite attracting more sign-ups than any other co-op, Health Republic lost about $130 million during its first year and a half in operation. While other co-op plans have struggled with low enrollment, the deeper problem for all of the plans is that beneficiaries appear to be sicker, and thus more expensive to cover, than expected.
Health Republic was one of nearly two dozen co-op plans backed by $2.4 billion in federal loans under the law, many of which are now struggling financially. Co-ops in Louisiana, Nevada, and Iowa have already closed down or announced plans to shutter, and a report this summer from the Health and Human Services Inspector General found that all but one of the plans lost money last year, and that there was a real possibility that many of the plans would not be able to repay their loans.
While some of Obamacare's co-ops may survive, it seems likely, given their generally precarious finances, that several more will eventually cease operations, and that taxpayers will ultimately end up shortchanged on much of the "loan" money that was used to help start the program.