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“It has become increasingly clear that continuing the CareConnect health plan is financially unsustainable, given the failure of the federal government and Congress to correct regulatory flaws that have destabilized insurance markets and their refusal to honor promises of additional funding,” said Michael J. Dowling, Northwell’s president and chief executive officer.
Dowling said CareConnect would've been profitable this year if not for the $112 million it had to pay into the Affordable Care Act's risk-adjustment pool. CareConnect would be facing another risk-adjustment payment of more than $100 million in 2018 from its 2017 small-group revenue, Dowling said.
"The continuing uncertainty in Washington about the future of the ACA, intractable regulatory problems and the federal government’s broken promise of so-called `risk-corridor’ payments to insurers provide us with no viable path to profitability in the foreseeable future,” Dowling said.
CareConnect will continue over the next year as the company works with others to help transfer policy holders to other health plans. Throughout the transition, CareConnect will continue to pay claims and serve members, patients, and providers. Many of CareConnect’s more than 200 employees will continue to have jobs during this transition period, and Northwell will assist them in trying to find other suitable positions within the health system, Dowling said.
CareConnect was established in 2013 as New York State’s first provider-owned commercial insurance company.
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