Two weeks ago we reported that in what at the time was still a rather isolated incident, Colorado's largest nonprofit health insurer (aka co-op), Colorado HealthOP is abruptly shutting down, forcing 80,000 Coloradans to find a new insurer for 2016.
At the time, we said that the health insurer had been decertified by the Division of Insurance as an eligible insurance company because the cooperative relied on federal support, and federal authorities announced last month they wouldn't be able to pay most of what they owed in a program designed to help health insurance co-ops get established.
In other words, one of the 24 co-ops funded with Federal dollars and created to give more policyholders control over their insurers - especially those who wished to stay away from various corporate offerings, had failed simply because the government was unable to subsidize it: the same government that spends $35 billion in global economic "aid" but can't support its most important welfare program.
Fast forward to today, when we learn that another co-op, this time New York's Health Republic Insurance - the largest of the nonprofit cooperatives created under the Affordable Care Act - is not only shuttering, but was engaging in fraud.
The fate of Health Republic Insurance was first revealed a month ago when the WSJ reportedit would shut down after suffering massive losses "in the latest sign of the financial pressures facing many insurers that participated in the law’s new marketplaces."
The insurer lost about $52.7 million in the first six months of this year, on top of a $77.5 million loss in 2014, according to regulatory filings. The move to wind down its operations was made jointly by officials from the federal Centers for Medicare & Medicaid Services; New York’s state insurance exchange, known as New York State of Health; and the New York State Department of Financial Services.In a statement, Health Republic said it was “deeply disappointed” by the outcome, and pointed to “challenges placed on us by the structure of the CO-OP program.”Health Republic has about 215,000 members, with about half holding individual plans and half under small-business coverage, a spokesman for the insurer said.
Today we learn that not only was this largest Co-op insolvent, it had also committed fraud. According to Politico, the collapsing insurance company that is creating headaches for hundreds of thousands of New Yorkers, misled state and federal officials about its finances, and will not be able to remain in business through the end of the year as originally hoped.
Because incompetence is one thing, but corruption: now that's real government work, right there.
The accelerated wind down is clearly a problem: the more than 200,000 customers insured with the co-op will lose their coverage Dec. 1, and must find a new plan by mid-November, according to the state and federal government. Health Republic insures about 20 percent of the state's individual market.
As Politico adds, the plan had been for Health Republic to make it through the end of the year. As recently as last week, company officials said there was enough in cash in reserve. But that apparently wasn't true.
Health Republic's finances are "substantially worse than the company previously reported in its filings," according to the state Department of Financial Services, which oversees insurance in New York, and the Centers for Medicare and Medicaid Services.
Full report by clicking link above.