A New Jersey health insurance provider created through the Affordable Care Act says concerns over its finances raised in an Inspector General report aren’t justified.
Health Republic Insurance of New Jersey enrolled 4,254 members in its first year, falling far short of its target of 18,000 sign-ups. While it brought in $19 million in premiums, it ended the year $16 million in the red.
A nonprofit, Health Republic is one of 23 cooperative-style insurers created through the health reform law to increase competition. It is backed by a $109 million federal loan.
“Starting a health insurance company is hard,” said Cynthia Jay, Health Republic’s chief marketing officer. “Not only did we not have information, but none of the other insurance carriers had information for this ACA implementation, so everybody was kind of stabbing in the dark.”
The government’s report failed to include the most recent enrollment numbers, Jay said. After retooling its plans and offering competitive prices, Health Republic gained more than 50,000 new members.
All but one co-op insurer lost money during their first year of operations.
“The low enrollments and net losses might limit the ability of some co-ops to repay startup and solvency loans and to remain viable and sustainable,” wrote Daniel Levison, the report’s author. Co-ops in both Iowa and Louisiana will have ceased operations by the end of 2015 due to financial concerns.
After the sizable jump in membership this year, Health Republic said it is on track to repay its federal loans. It is the first new health insurance company to enter New Jersey in nearly two decades.