NAHU Calls For Accountability In Termination Of Health Plans

(Washington, DC) – The National Association of Health Underwriters (NAHU) addressed concerns today about the health and financial wellbeing of health plan consumers affected by the termination of all Health Republic policies effective November 30, 2015. NAHU CEO Janet Trautwein made the following statement:

“The termination of both individual and small-group health plans by the largest health plan in New York’s exchange is a huge concern for thousands of New York families and small-business owners. These consumers must now scramble to get new coverage in place during what is, for many people, the busiest time of the year.

“Many clients of Health Republic have been denied services by healthcare providers because of the company’s financial uncertainty. While there are still many unanswered questions about exactly who will be held accountable for the cost of outstanding claims, New York State of Health, the state-run insurance marketplace, has assured consumers that they will not be charged for the amount they have already paid toward their annual deductible. Steps are also being taken to ensure continuity of care for expectant mothers as well as those in an ongoing course of treatment with a provider for a life-threatening or degenerative and disabling condition or disease.

“The unsung heroes in all of this are the health insurance brokers who represent the policyholders and who are scrambling to find replacement coverage during their busiest season of the year – open enrollment. Health insurance brokers provide an invaluable service to consumers, acting as their advocates with insurance companies as well as serving as an HR department for many small businesses. While the health and wellbeing of consumers remains the top priority for brokers, it should be noted that the demise of Health Republic has hit them very hard in another way – they have not been paid commissions since September.

“A review led by the New York State Department of Financial Services (DFS) and the federal Centers for Medicare and Medicaid Services (CMS) found that Health Republic's financial condition is substantially worse than the company previously reported in its filings to DFS. Though the company has not yet been declared insolvent, an independent manager has been assigned to oversee the company’s winding down of operations. DFS will continue its investigation of Health Republic’s financial condition and inaccurate reporting.

“Health Republic is just one of more than a dozen Consumer Operated and Oriented Plans (Co-ops) that are failing nationwide. The Affordable Care Act (ACA) provided more than $2 billion in loans to set up dozens of nonprofit co-ops as alternatives to major insurers. It’s not surprising that many of these co-ops are unsustainable without expected government subsidies since many were underpriced and under-reserved. The solution to these failed co-ops isn’t more government intervention and cost masking. It’s reining in healthcare costs and implementing reforms based on market initiatives.”

The National Association of Health Underwriters represents 100,000 professional health insurance agents and brokers who provide insurance for millions of Americans. NAHU is headquartered in Washington, D.C. For more information, visit www.nahu.org.

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