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Chris Wysocki
Caldwell, NJ
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Tuesday, 13 September 2016
Obamacare Death Spiral Update: Health Republic of NJ fails, dumps the Exchange
New Jersey's Obamacare co-op is down and out.
Faced with "a deteriorating financial condition," another health insurance carrier is pulling out of New Jersey's health exchange marketplace created under the Affordable Care Act, forcing 35,000 policy holders to find a new plan in 2017, the state's top insurance official announced Monday night.
Health Republic Insurance of New Jersey will serve customers through the end of the year, state Department of Banking and Insurance Commissioner Richard Badolato said.
The state is working out a "rehabilitation" plan that preserves the carrier's financial assets so medical providers will be reimbursed for the care they provide consumers for the remainder of the year, Badolato said in a statement late Monday.
"Rehabilitation plan" is regulator-speak for bankruptcy, although they're desparately pretending that everything is going to be OK, sometime in 2018, maybe. In the meantime they're taking a break.
Because no matter how you phrase it, New Jersey's Obamacare co-op is broke.
Health Republic got its start with $107 million loan through the landmark health care law, in an effort to create competition. But more than half of the nonprofit co-ops (or consumer-operated and oriented programs) have folded, crippled by higher than anticipated expenses and the financial requirements of the federal law.
Health Republic owes $46.3 million under the risk adjustment program tied to the Affordable Care Act, which requires insurers which enroll healthier and less costly enrollees to contribute to a fund that would bail out plans serving a larger share of sicker and most expensive patients.
The words you're searching for are "adverse selection."
Sicker people, higher costs, expanded mandates, fewer choices. And as you'll recall, Aetna, Oscar, and UnitedHealthcare have also bailed on NJ.
So now there are only 2 insurers left in our Obamacare exchange: Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth of New Jersey. Neither are known for their low rates.
The marketplaces which were supposed to open up competition have instead driven away most of the competitors. Which must mean Obamacare is "working," or something.
The "something" being, of course, the inexorable march to Single Payer Nirvanna, where the costs can really rack up and the opportunities for graft are endless. Quality of care will go down the tubes (just look at the VA, which is as close to Single Payer as we've got) but that just means the rubes will die off faster. So long as the bureaucrats get paid and the expense checks for their junkets keep rolling in our Single Payer future will be touted as rosier than a Bernie voter's glasses.
Want a good health plan? Take my advice. Don't get sick.
Posted at 09:48 by Chris Wysocki
[/obamacare]
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