Risk adjustment debt of $46M forces another co-op to drop
- Health Republic Insurance of New Jersey, a co-op created under the ACA, will not be offering coverage in 2017, reducing options for health insurance via the federal healthcare law from five this year to only two in the state, the Associated Press reports.
- The New Jersey Department of Banking and Insurance is placing the co-op in rehabilitation because of "its deteriorating financial condition," citing a liability of $46.3 million under the risk adjustment program.
- The co-op's exit will leave 35,000 consumers without its coverage, according to the AP.
Only six of the original 23 co-ops created under the ACA are left standing.
Another co-op dropping out of the ACA doesn't come as a surprise as even the insurers that were seemingly stable have been facing the same financial challenges with their marketplace participation.
eHealth Director of Public Relations and Communications told Patient Daily in a recent interview patient illiteracy of the ACA and its coverage is a major cause of its failures and pointed out that whether individual plans cover prescriptions has caused a lot of confusion. And to his point, Oscar Insurance Corp. dropped out of New Jersey's individual market in 2017 just last month arguing these insurance plans are not "working as intended and there are weaknesses in the way it's been set up."
Risk adjustment payments have also been said to put some co-ops "under significant financial strain."
Placing the co-op in rehabilitation will allow New Jersey's insurance department to preserve HRINJ's assets and the department plans on helping consumers and small employers secure 2017 insurance coverage.
“Our first priority in working with HRINJ under the anticipated order of rehabilitation will be to ensure that all HRINJ members and providers receive the service and payment promised them under the terms of their health insurance plans,” New Jersey Insurance Commissioner Richard J. Badolato said in a statement.
- Associated Press Another NJ Obamacare plan drops out
- State of New Jersey Department of Banking and Insurance Department Files for Rehabilitation of Health Republic Insurance of New Jersey
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