In a story dated Sept. 28, Syracuse.com covers the demise of Health Republic Insurance of New York. Health Republic is the largest of 23 nonprofit health insurers created by states under the Affordable Care Act (ACA). The company is deep in debt and its policies end on Dec. 31. This is the second time in three years that I have lost my health insurance as a result of the ACA.
I am not alone. Over 200,000 people in New York are losing their health insurance because of this shutdown. The company lost $130 million in its first 18 months of operation. The Chronicle of Philanthropy notes that this is the fourth, and the largest, ACA plan to have to close. Similar insurance nonprofits in Nevada, Louisiana and Iowa have also collapsed. The publication states that the Department of Health and Human Services has loaned Health Republic about $265 million in support.
Health Republic, in a FAQ, states that policies remain in effect until Dec. 31. Members like me can continue to use their insurance and claims will be paid. The open enrollment period for 2016 begins Nov. 1. All members will have to find new individual plans through the state website or an insurance broker.
I lost my existing health insurance coverage at the end of 2013 and began 2014 without coverage due to the problems with the various websites involved. With Health Republic, I obtained similar coverage, with prescription coverage for my medications, and a federal subsidy of my cost.
In 2015, my Health Republic premium is $271 a month. The lowest premium for a similar plan with the competition is $356. The “similar” plan has higher co-pays and deductibles than my plan. I have been wondering how Health Republic could afford such low premiums. It turns out that they could not.
The Kaiser Family Foundation published a report in June on projected price increases for low cost health insurance plans in a number of cities and states that illustrates the ongoing problems for ACA plans. While the national average increase for 2016 is 4.4 percent, states such as Virginia, New Mexico and Oregon will see those low cost plans increase in price over ten percent. The maximum federal subsidy will not change so many will find that their low cost plan costs a great deal more.
The Health Republic of New York Consumer Oriented and Operated Plan may not be the last to fail. The inability of the largest ACA nonprofit to perform in the marketplace does not bode well for the remaining 19. Thousands of others could soon join the 200,000 New Yorkers looking for affordable health insurance.