More CO-OP woes: Health Republic Insurance of New York to stop selling coverage
Health Republic Insurance of New York will discontinue selling policies at the end of this year, becoming just the latest state-based consumer operated and oriented health plan (CO-OP) to fail after struggling with financial difficulties.
Current individual coverage should continue for consumers through Dec. 31, though members will be able to choose a new plan for 2016 during the next open enrollment period, which begins Nov. 1, according to a letter to members from Health Republic CEO Debra Friedman.
"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, the state's acting superintendent of financial services, said in a statement from the New York Department of Financial Services about the shutdown.
Despite the CO-OP's closure, the Department of Financial Services assures consumers that they'll continue to have plenty of options to purchase coverage. An additional 16 insurers in the state will sell plans on the exchange during the upcoming enrollment period, it notes in its statement.
"Starting a new insurance company is a daunting task in any environment," Friedman says in her letter to members. And the challenge became too difficult to overcome given the "systemic challenges placed on us by the structure of the CO-OP program," she adds.
The health plan is not the only CO-OP to fail. Earlier this summer, Louisiana Health Cooperative announced that it will no longer sell coverage next year. In addition, Tennessee's CO-OP decided to freeze enrollment in January, Iowa's CoOportunity Health decided last December to stop offering plans through the state's marketplace, and Nevada's CO-OP announced just last month that it plans to close.
In fact, a recent government report found that 21 of the country's 23 CO-OPs incurred net losses, and 13 of the CO-OPs' enrollment figures were significantly lower than expected. Yet even though many CO-OPs continue to struggle, some of their leaders appear to have been well-compensated.
Execs well-paid even as CO-OPs struggle
Louisiana Health Cooperative becomes latest CO-OP to bite the dust
Tennessee CO-OP freezes enrollment
Iowa's CO-OP pulls out of marketplace despite first-year success
Nevada Health CO-OP closes amid financial woes
OIG report finds CO-OPs underperformed, didn't reach enrollment goals