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.