Posted on 11/17/2015 10:52:23 AM PST by SeekAndFind
When Health Republic came on the New York health insurance scene in 2014 it made a huge splash. Flush with Obamacare cash they offered bargain basement rates which attracted customers away from many other established insurance companies. It was simply the picture of success for the President’s new Affordable Care Act and the people rejoiced. (Syracuse.com)
Health Republic of New York made a big splash when it debuted in 2014 with rock-bottom health insurance prices that undercut its competitors across the state.
Its premium rates were 30 percent below average in Onondaga County. The new company, backed with $265 million in federal loans, quickly captured the biggest share of new business on the state’s health insurance exchange created by the federal Affordable Care Act, also known as Obamacare.
Fast forward less than two years and the picture has changed slightly. Okay… the picture has changed entirely. Like so many other dominoes in the Obamacare chain, New Republican went broke in record time and is being shut down by state regulators at the end of this month. They are unable to meet their financial obligations and health care providers are being stuck with the bill.
New York hospitals and doctors are worried they may be left holding the bag for millions of dollars owed to them by Health Republic, the financially troubled health insurer regulators are shutting down Nov. 30.
Hospitals are owed more than $160 million, according to the Healthcare Association of New York State — HANYS for short, a hospital trade group. Syracuse’s three hospitals are owed $2.2 million.
The state Medical Society is surveying doctors to find out how much they are owed. It estimates the insurer owes doctors “tens of millions of dollars.”
Things have gotten bad enough that state regulators have actually told Health Republic to stop making payments to the health care providers in order to facilitate “an orderly shutdown.” To say that doctors and hospital administrators who are already operating under strained budgets are in a bit of a panic is an understatement.
The big questions running around the state government at this point seem to have nothing to do with the fact that the Obamacare model as fallen flat on its face as it has in so many other states. Right now they’re scrambling to figure out who is going to wind up paying for this mess. The hospitals and health care provider networks have sent an urgent request for the state government to set up a “special guarantee fund” which would pay all the claims which Health Republic won’t be making good on. The insurance industry is opposing that, since none of the other providers who remain in the private market are being offered any such protection.
And yet, the costs are going to have to be covered someplace. That means one of two things when looked at from the ten thousand foot level. Either the state will reimburse all the costs or the hospitals will have to eat them and make up the difference from their future customers. Either way the result is the same: the taxpayers and consumers are going to foot the bill for this, and they’re talking about a tab that adds up to more than $160M, not counting any new receipts which come in for the month of November. Even for a fairly wide spread of territory across a single state, that’s one heck of a bite.
Yes, citizens, it’s another glorious tale of success for Obamacare. The one thing we can all rest assured of is that there is a big bill coming due when the wreckage from this program has to be cleaned up. I’ll give you three guesses as to who will be paying it and the first two don’t count.
NY’s biggest Obamacare co-op goes broke, leaving hospitals holding the bag.........as it was designed to.......................
the idea of the Co-ops was that the “for-profit” health insurers had to overcharge patients precisely because of the need for a profit margin, so a not-for-profit replacement would by definition be more efficient and therefore able to out-compete.
Something went wrong in that seemingly airtight logic, it would appear.
Funny, throughout all of the comments on that site no mention of the political party who rammed this down our throats. They won’t even mention Islam when saying how horrible Paris was.
No one was “rejoicing.”
Health Republic was still 30% higher than what I was paying previous to Obamacare. It was simply the least bad option for those of us who were forced to buy a new fascist government insurance scheme
Prop up ponzie insurers with enough seed capital to flip useful idiots to Obamacare, then pull the plug and force patients and doctors to single payor.
Communism is devious.
Do the executives of Health Republic all get ‘golden parachutes’ ?
Who’s the owner/CEO, and how much has he donated to the Dims?
History repeats itself, again.
This is the same thing that happened to "The Blues" some forty-plus years ago, except inversely.
I'm guessing the co-ops business model was based on expected outlays for the average NYS consumer's yearly consumption of medical services.
In this case, the lower premiums must have attracted substantially more of the "higher maintenance" customer, rendering their assumption of expenses very incorrect.
"The Blues" were hit by Life Insurance companies offering health coverage, skimming off the low maintenance customers, leaving the Blues with less revenue to cover the remaining high expense customers.
This is a newly established Coop (just two years ago ).
From Wikipedia:
https://en.wikipedia.org/wiki/Health_Republic_Insurance_of_New_York
Health Republic was created as one of 23 Consumer Operated and Oriented Plans, known as CO-OPs, established under the Affordable Care Act to increase competition in the marketplace and give consumers a voice in their healthcare.
Health Republic began selling insurance plans to individuals and small groups, both on and off the NY State of Health marketplace, in October 2013.
In September 2014, Health Republic members were able to vote for Member Directors on the CO-OP’s Board of Directors, with nine members ultimately elected from across the state, making up a majority of the Board.
From Daily Caller article about high salaries at health co-ops:
“Three Health Republic co-ops — in New York, New Jersey and Oregon — set up by New York’s Freelancers Union, at first appeared to pay reasonable executive salaries. The three co-ops established by Health Republic received a total of $435 million in start-up funding from the federal government.
However, in “supplemental†tax return footnotes, the three co-ops reported paying $17.3 million for “management services†provided by Independent Workers Services, which has the same Brooklyn, New York, address as the Freelancers Union.
The Freelancers Union was founded by former labor lawyer and liberal political activist Sara Horowitz. She and then-state senator Barack Obama served together as board members of a New York-based liberal think tank.”
“
Veronica Piotrowski appeared to earn $131,000 as the highest-paid executive of the Tempe, Arizona-based Compass Cooperative Mutual Health Network co-op. Kathleen Oestreich, the CEO, Jeaan Tkachyk the COO, and Tere LeBarron, the chief health officer, were reported to be unpaid for their work.
But entire Compass co-op management team comes from a for-profit partnership called Eastwick Strategy Group, which paid Oestreich $420,000, Tkachyk $296,000 and LeBarron $282,000.
Separately, the co-op also paid Eastwick an additional “management fee†of $2 million and another $5.4 million for “consulting.â€
None of the co-ops returned repeated calls from TheDCNF seeking comment.”
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