CareConnect is no longer writing or renewing individual policies for 2018 and will stop writing and renewing group policies on Nov. 30 this year, Northwell Health announced on Friday.
Northwell Health also said they will honor all existing health insurance policies through their remaining terms, including group policies that continue into 2018.
Richard Miller, the senior vice president and chief financial officer of Northwell Health, said that CareConnect aimed to provide easier and more affordable healthcare. But while the insurance company was not sustainable, Miller said they still intend to focus on the “health of the people of our community.”
“Although an insurance company proved unsustainable under current conditions, we will wind down CareConnect in a way that protects New Yorkers as we continue to develop our strategy of population health and value-based care,” Miller said.
The company said it worked with the state Department of Financial Services to create the wind-down plan.
The decision comes about a month after New Hyde Park-based Northwell Health announced that CareConnect, its insurance subsidiary, will be shutting down and dropping out of the Affordable Care Act marketplace.
CareConnect has 126,000 policyholders, including individuals, small businesses and other groups, with most of them on Long Island. The company said at the time that these people will remain covered as they’re transferred to new providers.
Northwell Health noted the high payment to the ACA’s risk-adjustment pool worth $112 million, which is about 44 percent of the company’s small-group health plan revenue plan revenue.
They also pointed to a lack of federal assistance – namely the federal government never reimbursed them $150 million they were promised.
The risk-adjustment program redistributes funds from plans with lower-risk enrollees to plans with higher risk ones. This aimed to push companies into insuring more people and spread financial risk, according to the Kaiser Family Foundation, which studies healthcare issues.
This followed a net loss of $157.9 million in 2016 for CareConnect, despite a near tripling of premium revenue from $127.5 million to $360.8 million.
Consumers looking for replacement coverage on the individual market can begin shopping in November for 2018 health coverage. Replacement coverage in the small group market could be found with the NYSOH Small Business Marketplace, the company said, now through Nov. 15 for coverage beginning on Dec. 1.
Anyone seeking more information can contact NY State of Health, the state’s official health plan market place, online at www.nystateofhealth.ny.gov or at 1-855-355-5777.