Health Republic lost nearly $59 million in the first six months of the year, leaving the insurer “insolvent” and in “hazardous financial condition,” commissioner Richard Badolato said.

It is the 17th of 23 co-op plans nationwide — consumer operated and oriented plans — kick-started with federal loans under the Affordable Care Act that has collapsed under financial pressure.

Plans will remain in effect through Dec. 31, but the company’s 35,000 individual and small group members will need to find new coverage for 2017.

Under the terms of the rehabilitation order, which was filed in state Superior Court in Mercer County, the commissioner will “exercise full and exclusive authority over the business and affairs” of the company.

The department hopes to stabilize the company’s financial condition “in anticipation of a potential return to the marketplace in 2018,” according to a news release.

Both the state and Health Republic blamed the insurer’s financial problems, in part, on the Affordable Care Act’s risk adjustment program, which is being overhauled by the federal government.

The risk adjustment program sought to redistribute money from insurers operating with healthier than average patient populations to those with sicker patients who offered plans on the state health insurance exchanges established under the ACA.

Health Republic estimated it would have to make a payment of $17.1 million, but actually ended up owing $46.3 million.

“Despite our hard work and growing customer base, the unfortunate necessity for complying with the ACA’s risk adjustment mandate has put the company under considerable financial strain,” interim CEO Tom Dwyer, said in a statement.

Health Republic was one of 23 co-op plans launched nationwide with federal loans to increase competition in the Obamacare marketplaces. The insurer received a $14.7 million start-up loan and a $94.3 million solvency loan.

Only six co-ops remain in business and many of the failed plans blame the federal programs that were meant to redistribute the risk of operating in the uncertainty of the new Obamacare marketplaces.

Small carriers, like Health Republic, have complained they are being forced to subsidize the bigger, more experienced insurers. Three co-ops are suing the federal government over implementation of the risk adjustment program.

At the end of August, the Centers for Medicare and Medicaid Services announced it plans to tweak the risk adjustment formula.

“I think [Health Republic] is hoping for change, probably at the federal level,” said Kathy Hempstead, a senior adviser at the Robert Wood Johnson Foundation. “That if those things get adjusted or turned around in ways that are more beneficial to them … maybe they feel like they could be solvent.”

Both Oscar and Oxford Health Plans, a subsidiary of UnitedHealthcare, announced earlier this year they would stop selling Obamacare plans in New Jersey in the wake of mounting financial losses.

The two remaining plans in the state are Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth

Read the rehabilitation order here: http://politi.co/2cjOL0j