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Stony Brook University, the only level 1 trauma center in Suffolk County, will only accept Health Republic Insurance of New York. The agreement between the hospital and Magnacare, the insurance company behind Health Republic Insurance, was announced just this February. (MANJU SHIVACHARAN / THE STATESMAN)

Stony Brook University Hospital will currently accept only one plan on the New York state health insurance marketplace created by the Affordable Care Act after reaching agreeable terms with just one company.

On Friday Feb. 14, the University Hospital announced an agreement with health insurance company Magnacare, to accept Health Republic Insurance of New York plans.

Health Republic is one of eight health insurance plans offered in Suffolk County on New York’s health exchange.

Hospital CEO Dr. L. Reuven Pasternak said the deal “came as the result of a constructive discussion that resulted in a solution that was fair for the hospital, physicians, company and most importantly, the patient.”


A week prior, Pasternak said the hospital would not be accepting any of the health exchange plans offered in Suffolk County because of low reimbursement rates.

The hospital’s primary concern is that the low reimbursement rate it would receive from some insurance companies will result in a loss in revenue and an inability to continue expensive services.

Dr. Kenneth Kaushansky, Dean of the School of Medicine and Senior Vice President of Health Sciences, said: “When the exchange insurance plans were first formulated, the insurance carriers expected us to accept about 30 percent lower reimbursements. If we did that, we would not be able to offer the high quality, unique services at Stony Brook.”

Pasternak highlighted the unique financial situation of the hospital, saying: “Although we are a state facility, our operational budget is not derived from tax or general state revenue. We support our operations from the revenue that we generate from the care that we give.”


Because it is the only public hospital in Suffolk County, Stony Brook University Hospital treats more patients than most health care facilities. As state-funded hospital, it must be open to treat everyone in the county—insured and uninsured. According its website, the hospital treats about 31,964 inpatients annually.

The reimbursement rates offered in the health exchange have been compared with Medicare and Medicaid rates, which are considered to be low.

According the The New York Times, Stony Brook Hospital billed Medicare $44,491 on average in 2013 for joint replacements, its most common treatment. Medicare generally foots 47 percent of the bill.  Though considered low, this rate was above the national average in 2013.

Though the hospital accepts Medicare and Medicaid’s low rates, it is reluctant to accept lower rates for private health insurance companies.

“In contrast to the Medicare and Medicaid government programs, the exchange is a collection of for profit insurance companies who receive funds from individuals, sometimes with government support, which are then responsible for providing care,” Pasternak said.


One of the appeals of Health Republic Insurance is that it is the only insurance under the CO-OP or Consumer Operated and Oriented Plan program on the New York health exchange.

The program, created under the Affordable Care Act, gives aid to not-for-profit companies so that they can offer insurance plans to create competition and lower prices among insurance companies.

Stony Brook Hospital said that it has not made a final decision on the remaining health plans and is currently still in discussion with five of the seven other plans in Suffolk County.


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