New York insurance regulators have promised independent insurance agents they will take corrective action following a flood of complaints from consumers about Health Republic Insurance of New York, the largest of two dozen Obamacare health co-ops.
Regulators held a rare conference call on Jan. 21 with officials from the New York State Association of Health Underwriters to discuss a growing chorus of consumer complaints about Health Republic.
The discussion was led by some of the state's top health officials including Donna Frescatore, the state health exchange's executive director, and Troy Oechsner, the deputy superintendent for health at the state insurance department.
The regulators vowed action would be taken. "They were very receptive and very responsive," Craig Hasday, an association leader and conference call participant, said in an interview with the Washington Examiner.
Enrolled members have complained that the health co-op has failed to issue ID cards and confirm coverage. They say the co-op has misled them about costs and the doctors participating in its network of providers.
Consumers also complain that Health Republic's telephone representatives know little about the co-op's offerings and often give incorrect information.
Health Republic is the largest of 23 state co-ops operating under a $2 billion Obamacare program designed to provide competition for established health insurance companies.
As an Obamacare co-op program flagship, Health Republic received $174 million in tax-free federal loans nearly two years ago, the largest single award by the Department of Health and Human Services. The formal name for the co-op program is Consumer Operated and Oriented Plan.
Health Republic's founder is Sara Horowitz, a veteran New York political activist and friend of President Obama dating back to his days as an Illinois state senator.
Before Health Republic, Horowitz founded the Freelancers Insurance Co., which has also generated widespread consumer complaints.
As reported previously by the Examiner, New York's Department of Financial Services ranked Freelancers among the state's worst health insurance companies for customer service in 2011 and 2012, the last two years for which the department has provided data.
In all, Horowitz has received nearly $345 million in federally backed loans, making her the largest single recipient of Obamacare co-op loans.
Last October, Debra Friedman, Health Republic's CEO, told local New York cable station NY1 that “being a co-op is a member-centric model, so we have the member's interest solely at heart."
“Health Republic Insurance's ads are already blanketing New York State,” Adweek reported last October in an article about the co-op's $1.2 million marketing campaign.
Bill Fitzhugh, a Manhattan small-business owner, told the Examiner he was initially happy when he found Health Republic.
“One of the reasons I chose them was because they promoted themselves as a nonprofit, run by a constituency kind of business model," Fitzhugh said.
However, he soon ran into multiple problems, including the fact that he and his three-year-old son were not on the policy.
“The people on the front lines were not trained. They did not know the product, did not understand the product,” he said.
“When I was thinking of buying it, I said, What is the co-pay?' The person I spoke with said, There is no co-pay with this particular plan because it's a platinum plan.' So my wife went to the doctor. And the doctor says there's a $35 co-pay," he said.
“For me, the disconnect is that they've been in the news a lot as, Hey, we're the good guys because our constituency controls our company.' And yet the customer service is atrocious -- worse than any health insurance company I've ever dealt with,” he said.
Just since Jan. 19, visitors have filled Health Republic's Facebook page with similar complaints.
Bob Booth wrote, “three weeks and I am still waiting for my ID card or ANY information that I am even covered. The premium was paid last year, supposedly effective January 1st, but I have received absolutely no information and there is no-one answer the phones or returning messages.”
Dmarie Marle agreed, writing, "No one answers the phone. I have to leave a message … What a SCAM !"
Jennie Lynn Schlageter wrote, “I got thru today but I hate to say it ... not educated enough on the Healthcare to know [what] they are talking about. A real shame.”
David Wagner learned his doctors might not accept Health Republic's network, "which means we purchased this health plan based on inaccurate information," he wrote. "We already want out and we're only 2 weeks into this policy!"
The Health Republic problems are reminiscent of an earlier rebellion by Freelancer customers who became so angry about rate hikes and poor service that they created a website featuring hundreds of complaints.
Craig Hasday, chief operating officer of Frenkel Benefits, participated in the conference call with New York regulators and told the Examiner that Health Republic “is an administrative nightmare” and “provides very little information” to customers.
Hasday is the association's legislative committee chairman, which represents New York's 500 independent insurance brokers.
James D. Schutzer, the association's incoming president and vice president of J.D. Moschitto & Associates, an employee benefits company based in New York City, also participated in the conference call with state regulators.
“I don't think overall we're bringing to their attention these problems for the first time,” Schutzer told the Examiner. “This was not news to them.”
Schutzer said the association only reaches out to regulators concerning serious problems.
"We're respectful of their time and we don't go to them with every little issue that we have, but when there is an industry-wide disruption, we'll certainly go to them," he said.
In a statement to the Examiner, Health Republic sidestepped the matter of growing consumer complaints and the state's concern with the level of customer service.
They emphasized that their members "are at the center of everything we do, and we are doing everything in our power to ensure that our members can access the healthcare that they need, when they need it."
The New York Health Department declined to issue any comment despite repeated Examiner calls.