Health Republic Insurance of New York, the largest of 23 nonprofit health insurers launched two years ago under the Affordable Care Act, has been ordered to close by state and federal officials after losing some $130 million since the start of 2014, The Washington Post and The Wall Street Journal report.
It will be the fourth Consumer Oriented and Operated Plan to shutter this year, following similar entities based in Nevada, Louisiana, and Iowa. The co-ops, as they are known, were set up to foster competition with traditional insurers, but most have suffered heavy losses, even those like New York's that proved popular with consumers.
Health Republic attracted more than 200,000 clients but appeared to set premiums too low to cover their medical expenses and its own costs, a Standard & Poor's analyst said. The U.S. Department of Health and Human Services canceled an agreement Friday that has steered $265 million in federal loans to the co-op, and state regulators ordered it to stop selling new policies and to wind down its operations.