Co-op Insurer Tops NY Health Exchange

Monday, June 23, 2014

Health Republic allows members to use hospitals that are not included in many exchange plans, including Memorial Sloan Kettering Cancer Center and NYU-Langone Medical Center. (Fred Mogul/WNYC)

About 370,000 New Yorkers have enrolled in private health insurance plans through the state marketplace, and nearly one in five of them signed up with a new kind of company. Health Republic, a start-up formed two years ago with federal funding, has the largest market share of any insurance carrier whose plans are offered on the New York State of Health, including longstanding industry leaders such as Empire Blue Cross and Emblem Health.

With 19 percent of enrollees, Health Republic has the largest market share in the state health exchange. It also uses an existing provider network that allows members access to hospitals that are not included in many exchange plans, including Memorial Sloan Kettering Cancer Center and NYU-Langone Medical Center.

Health Republic, which refused to speak with WNYC for this story, is one of three spinoffs around the country from the Freelancers Union and one of 23 “Consumer Operated and Oriented Plans” nation-wide. All are non-profits, set up with federal subsidies that have drawn fire from Republican opponents of the Affordable Care Act. Rep. Darrel Issa (R-Ca.), Chairman of the House Government Oversight Committee, has argued that because the Freelancers Union is a for-profit company — unlike Health Republic itself — it should have been ineligible to receive federal funding through the CO-OP program.

CO-OPs were created after the GOP defeated efforts to establish a government-backed “public option” on the exchanges.

“The idea is that you will have very different health plans than the ones to which we are accustomed,” said Bradford Gray, from the Urban Institute. “The organizations are really set up to be consumer controlled.”

Consumer control is a work in progress because the co-ops have only just begun to get consumers. Right now, Health Republic is being run like any other non-profit, but eventually, its board of directors will be controlled by members — a bit like a credit union. How these coops will all be “very different health plans” also is not yet clear, but one way they have distinguished themselves early on is by being relatively cheap. Elizabeth Carpenter, from Avalere Health, says with premiums so low, it is not surprising Health Republic is so popular.

“The question is, long-term, whether or not the co-op premiums really do cover the administrative and medical costs associated with the enrollees who enrolled in the plans,” she said.

Carpenter does not have any data to project about whether Health Republic can cover the cost of treating all its new customers. But she said that when she looks at charges from other insurance carriers in the region — including non-profits — she would not be surprised to find the company’s relatively inexpensive 2014 rates creeping up next year.

“You do have to question whether or not that price is sustainable,” she said.

A price hike could be the tipping point for Health Republic enrollee Drew DeMaio, who initially enrolled with Empire Blue Cross but switched for the lower prices and broader physician network.

DeMaio likes the company’s philosophy. He likes the doctors he can use in-network. And he likes the low monthly premiums — but even so, he’s pretty bitter about the high out-of-pocket expenses for all his doctors visits and MRI’s.

“Paying $300 a month — and then you’ve got to pay a deductible for all the serious stuff, anyway — that’s another $6,000,” he said. “I don’t make a lot of money.”

DMaio said he is spending so much money right now, that after he uses his Health Republic coverage to figure out what is causing his neck pain, he might just go back to being uninsured, paying out of pocket and gambling on the federal tax penalty.

That would be a problem for Health Republic. Covering people who are sick and losing them when they’re healthy is the exact opposite of what all insurers need to do to stay afloat.

Update, June 25, 2014: Health Republic has applied to state insurance regulators to increase customer premiums up to 19 percent, depending on the metal tier and the area of New York. In a statement online, the company says the price hike is “due to increasing medical costs, declining federal support, and to ensure our organization achieves long-term sustainability.” There is a 30-day public comment period, and final rates will be released later this year. Other carriers have also proposed rate changes, including both increases and decreases, and are in the process of notifying consumers.



Julianne Welby


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Comments [4]

David Menchell from Flushing, New York

I am both a physician that participates with Health Republic, as well as a subscriber/plan administrator for my office. At this point, I will probably look for another insurance carrier next year. I liked the idea of a not-for-profit cooperative company, but considering my premiums are higher for my so-called platinum coverage than my "average" prior medical insurance, with higher copays, deductibles and limited access to hospitals and physicians, I'm still trying to figure out what was in the "Affordable Care Act" that was supposed to make medical care more affordable. Maybe it's better for nonworking Medicaid recipients, or convicts or illegal immigrants, but for the average working class American, this law has been a disaster. This is also the concensus from patients in my office that have been forced to change their insurance coverage due to their previous policies being cancelled. Obama and his supporters in Congress basically lied through their teeth when they gave us those BS lines about "if you like your doctor, you can keep your doctor" and "if you like your insurance, you can keep your insurance". What a crock that was, and we fell for it. Now the word out of Washington is "Americans are just going to have to get used to limited access to medical care". Well, that wasn't the deal as it was told to us, and we should demand that the current law be changed to maintain access and quality while reduce costs for the poor suffering middle class. It is interesting to note that Congress and the President are exempt from the provisions of this law. I know of at least one ethical Congressman who is attempting to push through legislation that would require these Federal freeloaders to have the same insurance coverage as the rest of us. You would be amazed at how quickly the law would be amended if they had to deal with the same inflationary costs, bureaucratic inefficiencies, and lack of access to care as the rest of us.

Jul. 02 2014 05:25 PM
Paula Rackow from Brooklyn, New York

Like Janice Figueroa above, I, too, received the same letter from Health Republic. Wish Fred Mogul had done his homework so that he could have asked someone at Health Republic about the requested increase and included their response in his story. A 16 percent increase is almost as much as the kinds of increases I used to get with my previous insurance, provided by HIP (part of Emblem Health). They regularly upped their premiums annually by as much as 19 percent. Health Republic now charges about $200 less for the monthly premium (I have platinum level) than when I had HIP. I didn't choose Health Republic for this reason, but, suddenly, Health Republic is looking like yet another HIP. At least HIP offered lower, mail-order rates for some of my prescriptions, and you could go out of network if you chose. Thank goodness I have only three years to Medicare! Affordable healthcare? Perhaps for some, but not for a 62-year-old with a platinum plan!

Jun. 25 2014 05:10 PM
Steve from New York

Yep. I just got the same letter. They have requested a 16.5% increase for their EssentialCare Platinum Plan. I am paying $1,470.06 right now for a Family Plan. They are now asking for $1,712.87 for 2015. They are just like the "For Profits": suck you in and then suck the blood out of you. By the way, their customer service stinks....and their mail order pharmacy in seems like they do their best to avoid filling anything: even generics. I am fighting with them now to fill a drug that costs about $10 per month. They say they "can't get that particular manufacturer, so we can transfer it to a local pharmacy" who will fill for 30 days (instead of 90) for more money of course. You have to wonder who is getting rich off of running this plan. My guess is the recipients of the ObamaCare money who set it up and are now running it. So now I will pay the same as my business paid last year for an Emblem Health Plan that was far superior. Of course, Emblem had to cancel it because it didn't conform to the ObamCare law and my small business lost their coverage. It's like 1984....I feel like the next thing will be that implant in the book that stops people from thinking intelligently!

Jun. 24 2014 04:18 PM
Janice Figueroa from NYC

I joined Health Republic this year because of the rates and coverage. I just got a letter indicating that they have submitted a request to the DFS for a 2015 rate change. The rate change for me would be an increase of +16% per month. They claim that the change is for increasing medical costs, declining federal support and to insure their long-term sustainability.
I'm curious if all the other possible programs will be requesting rate increases as well. The consumer can't win!

Jun. 23 2014 09:46 AM

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