Founded in 1864. An employee-owned company.

Health Care News: Important News for HEALTH REPUBLIC Members

July 24, 2015

Health Republic has made the difficult decision to not file 2016 plans in the Albany, Utica / North Country and Hudson Valley regions. The decision to cease offering products in these areas in 2016 was made to ensure the long term growth and sustainability of Health Republic. Regretfully, the cost structure in these three regions would have required significant rate increases that they felt were in conflict with their mission as a Consumer Operated and Oriented Plan (CO-OP) to offer affordable and consumer-centric health plans. Please see the below FAQ that will explain the timeline and details of these changes. 

Why is Health Republic reducing its service area?

  • Health Republic has made the difficult decision to reduce its service area in the below mentioned regions due to the higher cost structure and utilization that are not sustainable going forward.
  • It is important to note that while Health Republic has submitted its 2016 rate filing with this proposed reduction in service area, the service area reduction is ultimately subject to DFS approval.

 Which regions are affected by the proposed service area reductions?

  • Beginning in 2016, Health Republic will no longer offer individual and small group coverage in the Mid-Hudson, Albany, and Utica / Watertown regions.
    • Specifically, Health Republic would stop offering its individual products both on and off the Exchange as of January 1, 2016, and not renew any small group contracts after January 1, 2016.

 Which products are impacted by the service area reduction?

  • All Health Republic individual and small group products will be discontinued in the affected regions.

How does this affect small groups in the affected regions?

  • Small groups domiciled in these regions will continue to receive coverage until their coverage expiration date during the 2016 calendar year. Additionally, Health Republic will honor plan renewals for these small groups throughout 2015.
  • Health Republic will also continue to accept new business from small groups domiciled in the affected regions until December 1, 2015. December 1, 2015 is the last possible effective date for new small groups in the affected regions. In addition, small groups can continue to add new members to their existing plans until their enrollment anniversary date.
  • Small businesses domiciled outside these regions will not be affected. Furthermore, employees of these small businesses will not be affected even if they live within the affected regions.

How does this affect individual policy holders?

  • Individuals living in the affected regions will be able to keep their individual policies until December 31, 2015. 
  • Individuals living in the affected regions who qualify for a Special Election Period (SEP) will continue to be eligible to apply for Health Republic coverage through the end of 2015.

 How does this affect other regions across the State?

  • In the past, Health Republic has cross-subsidized market regions. However, as medical loss ratios (MLRs) rise in their costlier regions, they have decided to end this practice of cross-subsidization in order to deliver value to their core markets on a long-term basis. Furthermore, any continued cross-subsidization would have resulted in higher rate increases across all regions and would have impacted each small group and member.
  • By focusing on regions where its sustainability is the strongest, Health Republic can continue its mission of providing access to affordable care to as many New Yorkers as possible. 

When will members/small groups be notified of the discontinuance of their health plan?

  • Pursuant to NY Ins. Law §4304 and in accordance with the Individual Contract, a member enrolled in an individual plan will be notified five (5) months in advance of the discontinuance.
  • Pursuant to NY Ins. Law §4305 and in accordance with the Group Contract, a small business (as well as all its "employees and member insureds" covered under such small group coverage) will be notified ninety (90) days in advance of the discontinuance. 

Why is the cost of care higher in these affected regions?
Higher health care delivery costs in some areas are being driven by provider consolidations, which is reducing competition. This is a critical public policy issue. It is likely to see further provider consolidations, resulting in higher costs and less plan options for customers.