The New York State Department of Financial Services (NYDFS), along with CMS and the New York State of Health (NYSOH) marketplace, has directed Health Republic Insurance of New York, a Consumer Operated and Oriented Plan (CO-OP), to stop writing new health insurance policies and wind down its operations by the end of 2015. The decision arose “because of the likelihood that Health Republic Insurance of New York would become financially insolvent,” Kevin Counihan, CMS’s director and marketplace CEO, said in a NYDFS press release announcing the decision.

In a letter to customers posted on the CO-OP’s website, Health Republic CEO Debra Friedman said she was “deeply disappointed” with the outcome, but that it was in the members’ best interests. “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,” she added.

Existing individual Health Republic policies will remain in effect through Dec. 31, 2015. NYDFS announced the decision ahead of the November 1 start of the NYSOH open enrollment period for 2016 policies to help ensure continuity of coverage for consumers. For 2016, 16 health insurers are expected to offer individual coverage on the state’s marketplace.

Friedman confirmed that coverage for current members would continue through the end of 2015 and that the insurer would process all claims for the year. Existing Health Republic small group plans will remain in effect; NYDFS and NYSOH will evaluate and announce a decision on Health Republic’s small group plans.

Health Republic is the fourth CO-OP to wind down operations in 2015. Most recently, Nevada Health CO-OP in late August announced plans to cease operations, following Louisiana Health Cooperative in July and CoOportunity Health in January 2015.

See the table for Health Republic’s number of individual on-exchange plans and average premium rates, by tier, from data in AIS’s Health Insurance Exchange Database: 2015 Plans and Premiums.

To view the NYDFS press release, click here.

To read Friedman’s letter to members, click here.

© 2015 by Atlantic Information Services, Inc.