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Big health co-op collapses

Regulators have ordered Health Republic Insurance of New York, the biggest nonprofit health insurer spawned by the Affordable Care Act, to shut down as it moves toward insolvency. This will be disrupt  coverage for more than 200,000 New York state residents and is the fourth such co-op to collapse in recent months.

Federal and state regulators have been working together to keep these new organizations going in the face of the fact that most are losing a lot of money.

The Washington Post reported that “Because each co-op exists in a different state and different health insurance climate, Health Republic’s collapse is not a harbinger for all the rest, said Peter Beilenson, chief executive of Evergreen Health Cooperative, in Maryland. Still, he told The Post, “{I]t clearly is not good for the [co-op] program, because it is the biggest one, and it’s obviously going to get a lot of attention.”

“Beilenson said that Health Republic’s failure shows that federal health officials should make it easier for the co-ops to raise outside capital, which some need if they’re going to last long enough for them to become financially stable.”

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