Health Republic Insurance, one of two federally created Consumer Operated and Oriented Plans in Oregon, won’t offer plans in 2016 and is winding down operations, it announced today.
The decision comes after the federal government announced if would pay only 12.6 percent of what is owed to insurers under the “risk corridor” program. The decision has a negative financial impact of more than $20 million onHealth Republic, CEO Dawn Bonder said, in a statement. All current Health Republic individual and small group policies “remain in full effect through the end of 2015,” the company announced. The Lake Oswego-based health insurer has nearly 15,000 members, including employees from more than 800 small businesses.
“Since our inception in 2013, Health Republic designed and priced all our plans in reliance upon the risk sharing guarantees of the Affordable Care Act,” Bonder said, in a statement. “This has placed us in a difficult financial position that could jeopardize our members and partners. As a result, we believe the most ethical step is for Health Republic to refrain from entering the market in 2016 and begin an orderly wind down of business.”
Health Republic said it will work with the Oregon Insurance Division to “ensure a smooth transition” and will pay all claims through 2015.
The risk corridor program, which came up far short of the money insurers are owed, also hit Moda Health particularly hard.