Health Republic, an Obamacare co-op in New Jersey, has been taken over by the state Department of Banking and Insurance and will be shut down in 2017, though the insurer hopes to return in 2018 if a state rehabilitation plan is successful. The Asbury Park Press reports:

The options for New Jersey consumers who buy health coverage through the Affordable Care Act will dwindle to two next year, from five in 2016, after state regulators take over Health Republic Insurance of New Jersey. The nonprofit company, a start-up established through President Barack Obama’s signature health law, has 35,000 members.

The state Department of Banking and Insurance moved Monday to take over Health Republic — known as a consumer-operated and –oriented, or COOP, plan — because of its “hazardous financial condition.” It was one of only a handful of the 23 original COOP plans established by the law to survive. Once its financial condition is strengthened, Health Republic may rejoin the marketplace in 2018, the department said in a statement issued Monday.

Health Republic published a letter on its website explaining that the cost of complying with Obamacare’s risk adjustment payment was putting them, at least temporarily, out of business:

On June 30, Health Republic was ordered to pay $46.3M, in accordance with the federal government’s risk adjustment formula. The formula was devised to compensate insurers in the individual and small group markets who have sicker, costlier members. However, the methodology in effect penalizes companies with healthy member populations.

Despite our hard work and growing customer base, the unfortunate necessity for complying with the ACA’s risk adjustment mandate has put the company under considerable financial strain. Rehabilitation will enable our company to stabilize, during which time measures to strengthen our financial condition can be pursued, in anticipation of returning to the marketplace in 2018.

According to the site Healthcare Dive, that leaves just six of the original 23 Obamacare co-ops in operation next year.