The New York State of Health, the state's health insurance exchange, or marketplace, established under the Affordable Care Act (ACA), and the state's Department of Financial Services (DFS) announced on November 13 that three insurers will assume responsibility for enrollees covered by the failing Health Republic Insurance of New York cooperative. DFS had directed the nonprofit co-op in September to wind down its business by December 31, but on October 30 DFS announced that the deadline had been moved up to November 30.
Fidelis Care, Excellus BlueCross BlueShield, and MVP Health Care have agreed to auto-enroll individuals covered under Health Republic's plans who reside in their respective service areas in order to ensure continuity of care. Individuals will receive credit for any deductible and out-of-pocket amounts that they have already paid through their Health Republic coverage during 2015. Fidelis, Excellus and MVP each already cover at least 20 percent of the individuals enrolled through the exchange in their respective service areas.
Health Republic is one of many struggling or failed co-ops ("Consumer Operated and Oriented Plans") created under the ACA, as previously discussed here. In her letter to insureds in September, Health Republic CEO Debra Friedman said, "Starting a new insurance company is a daunting task in any environment, but the systemic challenges placed on us by the structure of the CO-OP program were simply too difficult to overcome."
Participants in the co-op program received nearly $2 billion in startup loans from the Centers for Medicare & Medicaid Services, but an additional $1.4 billion was eliminated in the Congressional "fiscal cliff" negotiations in January 2013.
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