Massive congressional cuts to the risk-corridor program, aimed at backstopping the nascent Affordable Care Act marketplaces, also contributed to its demise.
Health Republic's balance sheet showed liabilities exceeded assets by $364 million as of Dec. 31, 2015—a grim reality for policyholders and providers seeking payment. The insurer had $209 million in unpaid claims to providers and had received $1.7 million in premiums from customers whose coverage was worthless.
Health Republic had about $119 million in assets at the end of 2015. Expense reports show the company has spent nearly $6.9 million in legal, consulting and administrative services since its liquidation began last May.
The company received about $538 million in premiums in 2015 but spent $1 billion on operations. In New York state, insurers are required to spend at least 82% of premiums on medical expenses. Health Republic spent 164% of the premiums it received on care.
Correction: Health Republic's balance sheet showed liabilities exceeded assets by $364 million as of Dec. 31, 2015 That fact was misstated in an earlier version of this article.