ALBANY, NY — Some of the most affordable health insurance plans to emerge in New York State after the Affordable Care Act (ACA), or Obamacare, became law were those created by Health Republic Insurance of New York (HRINY). People signed up with HRINY in large numbers, but now, the agencies that control the health insurance market are telling thousands of HRINY’s customers, including several at The River Reporter, that they must immediately find new coverage because their existing policies will be terminated at the end of November. About 200,000 individuals, some through small businesses, signed on to HRINY.

The regulatory agencies are the New York State Department of Financial Services (NYDFS), the New York State of Health Marketplace (NYSOH), and the federal Centers for Medicare and Medicaid Services (CMS). Back on September 25, the agencies determined that HRINY would be required to stop writing new policies but would be responsible for fulfilling the obligations of existing policies through the end of 2015.

However, on October 30,, the agencies announced in an updated release that said additional information on HRINY’s finances showed that “the company’s financial condition is substantially worse than the company previously reported in its filings... In light of these developments, [the agencies] have determined that it is in the best interest of consumers to end all Health Republic policies—both individual and small group—on November 30, 2015 so that customers can transition to new coverage after that date.”

As a practical matter, that means all individuals covered by HRINY will have to find coverage for the month of December, and they must also sign up for new policies to cover them through 2016.

In a statement released on October 30, HRINY said, “We have been working closely and transparently with our state and federal regulators since our inception, including monthly regulatory filings and numerous meetings to discuss potential avenues to improve our financial position. As recently as August 2015, CMS conducted an independent financial review. Considering the insurmountable financial gap created largely by the risk corridor program only paying out 12.6% of the $149 million Health Republic was owed for 2014, we believe winding down on November 30 is a prudent decision. Our foremost concern is that our members are transitioned to new plans without disruption to their care, and we will work with DFS to achieve that end.”

According to a story in the Wall Street Journal on October 1, the risk corridor program is a government program that was created by the Affordable Care Act to absorb some of the risks associated with health insurance co-ops such as HRINY.

Federal authorities determined recently that health insurance co-ops would receive much less revenue than they were rightfully entitled too, because the pool available for making those payments is currently not large enough to pay all of the insurers. That pool is expected to grow in the future and the payments are ultimately supposed to be paid to insurers in future years. But that won’t be soon enough to save HRINY.

HRINY is one of 23 healthcare co-ops created under a portion of the ACA, which was set up after the prospect of establishing a “public option” was abandoned. The co-ops were supposed to provide a non-profit healthcare option, but 10 of them are now going out of business. Critics blame the failure, at least in part, on Congressional budget cuts that slashed the amount of funding going to support the co-ops.