Patients and doctors across the Catskills have been scrambling to deal with the abrupt closure of Health Republic, a troubled health insurance company that is closing for business today, Monday, Nov. 30.
The shuttered company is no longer paying its claims, leaving doctors unsure whether they will ever be paid for seeing Health Republic patients. Some doctors have turned patients away, or are bargaining directly with patients over their medical fees.
In September, New York State regulators ordered Health Republic, the largest of many health insurance cooperatives to be established across the country as part of the Affordable Care Act, to close at the end of 2015.
Then, in late October, as the company’s dire financial state was revealed, state regulators bumped up the company’s closure date to today, Nov. 30—giving patients and doctors only a month to react.
Health Republic’s collapse has forced a panicked scramble among patients and doctors in upstate New York. Local doctors have worried that Health Republic will default on bills, and at least one practice, the Llobet Medical Group, has turned away patients who have Health Republic insurance.
“This was one of the biggest disasters ever,” said David Cordner, an administrator at Llobet Medical Group, a primary care practice with offices in Margaretville and Kingston. “I don’t understand why New York didn’t see this a lot sooner. Nobody got paid. Where was the money going?”
Congressman calls for investigation
Less then two years after opening its doors and accepting over 200,000 patients across New York, the Manhattan-based nonprofit insurer collapsed because it couldn't financially keep up with the demand for coverage.
The company launched in 2013, financing itself with $265 million in federal loans. The company offered lower rates than most of its competitors, proving to be a draw for young people and the self-employed, but it lost millions in the two years it operated.
Now, New York State Senators Kemp Hannon and James Seward are demanding an explanation.
“It is extremely important to determine what led to Health Republic's failure, and it is our intention to pursue legislation to avoid such a catastrophe in the future,” the pair wrote in a letter to state regulators earlier this month.
U.S. Congressman Chris Gibson is also calling for an investigation, and says that Gov. Andrew Cuomo is at fault.
"$265 million of taxpayer money disappeared and 215,000 New Yorkers are facing turmoil in their healthcare coverage,” he told the Watershed Post. “There is no question that there needs to be an investigation to see where there was wrongdoing. This happened on Governor Cuomo's watch.”
Doctors refuse to accept Health Republic insurance
Multiple Catskills residents say that, in the wake of Health Republic’s collapse, local doctors have refused to accept their Health Republic insurance altogether.
Under state law, doctors are required to give care to Health Republic patients until the end of November, but there have been reports locally and statewide of doctors turning patients away.
Candace Rudd, a Roxbury resident who owns a hair salon, said that her doctor’s office informed her that it no longer accepted her insurance while she was making an appointment this month. The office, which Ms. Rudd did not identify, then said she could see the doctor for a $100 fee, which was eventually reduced to $50.
"It was like they were negotiating a doctor visit cost," Rudd said. “We were left without insurance."
Andes resident Joe Damone said that the Llobet Medical Group in Margaretville cancelled his wife’s appointment for a preventative care procedure this month because she had Health Republic insurance. (Editor’s note: Damone is related to Watershed Post publisher Lissa Harris.)
"My wife was denied coverage at Dr. Llobet's office in Margaretville," Damone said. When Damone reported the cancellation to state regulators, Llobet’s office called and re-scheduled his wife's visit, he said.
Another Catskills resident, who asked not to be identified, said that the Llobet Medical office in Kingston refused to accept her Health Republic insurance for a doctor’s visit this month. Instead, the practice charged her a flat cash fee for care, she said. She is reluctant to return to the doctor’s office because it won’t accept her insurance.
“I have to wait until I have new coverage or find a new general practitioner to visit in the area,” she said.
“A little bit of a panic”
David Cordner, an administrator at Llobet Medical Group, confirmed that in the confusion of the announcement about Health Republic’s closure earlier this month, his office did refuse to accept Health Republic insurance from patients.
Left: Dr. Paul Llobet, who runs the Llobet Medical Group.
“There was no malice,” he said. “We ended up in a lot of trouble with that. I think a lot of physicians were in a little bit of a panic. [Health Republic] was supposed to terminate coverage on Dec. 31, and then regulators said, ‘No, we’re going to do it sooner than that.’ I really feel bad that this was how that went on. We did try to fix it. ”
Cordner said that his office negotiated flat rates with its patients instead of accepting Health Republic insurance earlier, but is now accepting the insurance and is bracing itself to absorb the loss if the insurer doesn’t pay.
“Chances are we aren’t going to get paid,” he said. “We are not chasing after the patients for that money. That’s it.”
Today is the last day Health Republic insurance will exist, Cordner noted.
“As of tomorrow, it’s a done deal,” he said. “It was bad all around. You hope that, whatever the investigation shows, that you were able to learn from it.”
Doctors are asking the state to cover Health Republic’s unpaid bills, but it’s not clear whether that will happen, according to the AP.
Llobet’s practice is one of many doctors offices and hospitals across New York that will be left holding the bag for Health Republic’s unpaid bills. Forty-two percent of the healthcare providers who responded to a survey conducted by the Medical Society of the State of New York say that Health Republic owes them money, much of it in amounts over $5,000.
The Watershed Post contacted other doctors and hospitals across the Catskills to discuss Health Republic’s collapse. The Bassett Healthcare Network, which serves Otsego and Delaware counties, and the Catskill Regional Medical Center, which serves Sullivan County, did not return calls for comment.
New insurance woes
People who are insured by Health Republic have until midnight tonight to choose new insurance coverage or they will be automatically enrolled in a new plan by the state.
And that new plan is only good for one month—to get coverage for 2016, they will have to enroll for January coverage separately.
The unexpected transition has been a hassle, according to Mamaroneck business owner Tom Quatroni, who had several of his employees enrolled through Health Republic. Quatroni said that none of the available replacement insurance plans offer good deductibles for his staff.
Quatroni said that his company, which has been in the heating and plumbing sector for more than 30 years, has only changed its insurance providers maybe four times in its history. “We never had a problem before Obamacare,” he said.
Bovina resident Tom Martone, who is buying insurance for himself, fears that he his current doctor won't be covered under his new insurance.
“There are no insurance options available for me in the New York State Marketplace that are accepted by the organization for which my primary physician works,” Martone said.
Unable to decipher what provider is accepted where using the tools available on the website, Martone has asked an insurance navigator to help him choose insurance on the state’s complicated marketplace.
"In the meantime, the end of November deadline looms,” he said.
Rudd, the Roxbury salon owner, is also frustrated with the process of finding new health insurance on such short notice.
“The government needs to make these companies accountable,” Rudd said.
Julia Reischel contributed to the reporting of this story.
Editor’s note: Julia Reischel and Lissa Harris, the editor and publisher of the Watershed Post, were insured by Health Republic until the insurer collapsed.