A secretary answers the phone at a local insurance agency Monday afternoon, but her voice is so hoarse she can hardly speak.
“I’ve lost my voice because so many people have been calling,” she says. “People have been calling and asking, ‘What do I do? What do I do?’ ”
She coughs as she puts the phone down.
What she’s talking about — or at least trying to — is a decision made late last month by New York State regulators that’s forcing the largest health insurer in the state to stop covering its policyholders effective Nov. 30.
“I’ve never been in this situation before,” said Randy Morreale, a partner with The Neefus-Stype Agency, which has offices in Southold and Aquebogue. An insurance salesman since 1992, Mr. Morreale said, “It’s never been this bad.”
In late September, the state’s Department of Financial Services announced that Health Republic was not financially stable enough to offer insurance in 2016. But in late October, the DFS pulled the plug on the insurer even faster than previously expected. Instead of ceasing operation at the end of 2015, the state forced it to shut down a month earlier.
According to a statement from the DFS, a review of Health Republic’s finances undertaken after its first announcement “found that the company’s financial condition is substantially worse than the company previously reported in its filings.”
Health Republic was one of 23 Consumer Operated and Oriented Plans (CO-OP) created through the Affordable Care Act, commonly known as Obamacare. Going into 2016, 15 of those co-ops will remain nationwide. Until its plug was pulled, Health Republic was the biggest one left standing.
Finding health care for employees has never been an easy or enjoyable task. But because of the size and scope of Health Republic — a state report issued in June noted that it provided insurance for more than 85 percent of small businesses in Suffolk County — the strain on local businesses and insurance agents has been particularly stressful this fall.
“It’s scary, really,” said Josephine Douglas, general manager at Flanders Heating and Air Conditioning. The company employs 50 people and had offered Health Republic to its employees, and “everyone was pretty happy with it,” she said.
But for some, the plan was too good to be true — at least for policyholders and beneficiaries. After getting a kickstart with $265 million in loans backed by the federal Health and Human Services Department, the co-op — which was also the most popular individual carrier in Suffolk — was unable to pay them back heading into another year, forcing the early shutdown.
A “frequently asked questions” section on Health Republic’s website states, “Since its first year of operations in 2014, Health Republic has been experiencing financial difficulties.”
In itself, that wouldn’t necessarily cause the demise of the health care provider. Health Republic officials have blamed the fact that a federal insurance fund created with the Affordable Care Act was reimbursing the company only 12.6 percent of what it was owed for 2014, creating an “insurmountable financial gap.”
The co-op is now under investigation by the DFS and New York State Department of Health for “the inaccurate representations Health Republic made to the State about its financial condition.”
The last-minute changes in the health insurance marketplace have meant a hectic month for small business owners — and their insurance agents.
“I’ve never been so busy in my life,” said Anthony Cardona of Water Mill’s Cardona & Cardona Company, an insurance company.
But at least he’s not alone.
“I’m having the same issues everyone else is having,” said Paul Romanelli of Suffolk Security Systems. “Just trying to scramble and find coverage at the right price, and make sure all of my employees are taken care of.”
Health Republic members have until Nov. 15 to sign up with a new insurer online and until the end of the month to sign up over the phone. The DFS and DOH are working with other insurance companies to guarantee that any Health Republic members who do not sign up with a new carrier are automatically enrolled with another company so there are no gaps in their coverage. More information on that is expected in the coming days.
Photo: Flanders Heating and Air Conditioning general manager Josephine Douglas looks over new health Insurance applications Friday afternoon. (Credit: Barbaraellen Koch)