Obamacare

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.

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Whitehouse.gov

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. 

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  1. taxpayers will ultimately end up shortchanged on much of the “loan” money that was used to help start the program.

    Surprise, surprise, surprise!

    /Gomer Pyle

    1. O ye of little faith.

    2. “But we will of course, begin a typical rational and thorough analysis and immediately take corrective action, because frankly, something like this has never happened in a government program!”

      /beaurocracy

    3. It wasn’t a bug – it was a feature. Cuz, if you can’t make it here, you need single payer.

  2. Awaiting troll to appear and proclaim;

    1) PHAKE SKANDULL,

    2) O!Care is the greatest free market action in the history of health care,

    3) TEAM RED PENUTZ FAULT!

    1. It’s no surprise to me that you libertardians don’t want to give healthcare to the poors.

      1. Tony – is that you?

    2. Libya AND PPACA may be too much at once. His bullshit generator is going to overheat.

  3. I am still waiting for the $2,500 a year in savings.

    1. Market failure!

    2. That’s savings created or saved. See, you would totally be paying $2,500 more a year in a free market, and you can’t disprove that!

    3. He was expecting hyperinflation to make it so.

    4. Maybe you’ll get one big fat check in your stocking this year – if you’re a really good little boy

  4. This is why we need Medicare for All! Feel the Bern!

    1. Would you want to feel the Bern from that guy?

  5. So they’re losing money on each customer, but they make up for it with volume right?

    1. it stimulates the economy

    2. We have been in this business a long time. With our experience, we’re gonna have ideas for change combinations that probably haven’t occurred to you. If you have a fifty-dollar bill, we can give you fifty singles. We can give you forty-nine singles and ten dimes. We can give you twenty-five twos. Come talk to us.

      We are not going to give you change that you don’t want. If you come to us with a hundred-dollar bill, we’re not going to give you two-thousand nickels..unless that meets your particular change needs. We will give you.. the change.. equal to.. the amount of money.. that you want change for!

    3. The famous government multiplier!

  6. Obamacare is as much fun as an untreatable STD.

    1. Less fun, because we didn’t even get to have a good time catching it.

      1. You’re my favorite disease vector.

  7. It’s actually called “Health Republic?” That’s the most Orwellian name ever.

    1. Health Republic has always been at war with economics.

  8. “”””is that beneficiaries appear to be sicker, and thus more expensive to cover, than expected.””

    What did they expect when they mandated that they had to ignore pre-existing conditions.

    Mandate car insurance and tell people they can get covered no matter how many wrecks their car has had and watch the insurance companies go broke.

    1. or watch everyone’s exorbitant rates reflect the new baseline of losses.

  9. New York state’s Health Republic […] 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.

    Sorry, but they can’t shut down. Health care is a right, according to the supporters of the new law and of a single-payer system. If healthcare is a right, then the non-profit cannot simply “shut down” and leave thousands of subscribers bereft.

    I don’t think the supporters of “free healthcare” understand what having something as a matter of right entails. If it’s your right, it is because you possess it. It is yours, not someone else’s. That means that the labor coming from the doctors and nurses, the infrastructure, the medicines, the therapies, are yours, which in turn means that the act of shutting down a business such as Health Republic or a hospital or even the VA is a criminal act, as there would be no difference between that and stealing your property.

    The Marxians want their cake and eat it, too. They will never concede that rights entail possession (which they do), only an obligation (which they don’t.)

    1. The Marxians don’t (won’t) understand the meaning of TANSTAAFL, will they?

    2. Damn straight. The managers of Health Republic are wreckers (and probably kulaks as well). Time to expropriate the expropriators!

  10. New York’s Health Republic signed up more people than any of the health law’s other co-ops. It’s still shutting down.

    That’s why it’s shutting down. A successful insurance firm isn’t made by simply having warm bodies on the rolls. A successful insurance company discriminates.

    1. Well, it’s agin’ the law for an insurance company to be successful then, innit.

      1. I don’t know about that. The huge insurance companies are merging and getting booming profits.

  11. Scientists really need to come up with a better term to describe the way physics and economics work. As long as they keep talking about physical and economic “laws,” politicians will continue to believe governments can amend or repeal them, just like the laws Congress writes.

    1. Politicians put way more effort towards repealing physics/economics than congressional laws.

  12. This is going to keep happening, and not just to co-ops, but to private insurers.

    I just received a notice in the mail that my insurance policy is being canceled because the New Mexico Department of Insurance did not approve Blue Cross Blue Shield’s request for a 51 percent rate increase on plans in the state. According to an Albuquerque Business First article, BCBS reports “way more people” than anticipated purchased insurance from them in 2014 (which I read to mean, “We spent way more than anticipated caring for Medicare patients”), because they then go on to say that the vast majority of these people are “very sick.” Hence, the proposed rate increase, which would have sent my monthly individual policy soaring to over $450 a month.

    The New Mexico Dept. of Insurance said “nyet” to the increase and so, rather than offer policies on which they are losing money, BCBS chose to back out of New Mexico almost entirely, offering only one policy for 2016.

    My BCBS advocate anticipates similar things happening in the four other states they serve: Illinois, Texas, Oklahoma, and Montana. Which in several years could mean the largest provider of health insurance in the country for the past 75 years will be out of business. If BCBS falls, other insurers will likely follow suit, leading to a crisis that will only be solved in one of two ways: repeal Obamacare and return medicine to the free market OR socialize it entirely. Shall we take bets on which is most likely to happen?

  13. the deeper problem for all of the plans is that beneficiaries appear to be sicker, and thus more expensive to cover, than expected.

    Than expected?

    I think this expectation was well expressed by all of the “racists” who opposed passage and implementation.

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