CareConnect Pulling Out Of New York Insurance Market
CareConnect, the health insurance company started by Northwell Health, has asked state permission to withdraw from the individual and small group market, the latest evidence of how hard it can be for new companies to compete with legacy players in the insurance space.
The company reported a $59 million underwriting loss through the first six months of 2017, up from a $48 million underwriting loss through the same period in 2016. Revenues were growing steadily but were not keeping pace with the rising costs of prescription drugs and hospital bills, particularly out-of-network charges. Administrative expenses continued to climb as well, increasing to $42 million during the first six months of 2017, up from $34 million during the same period in 2016.
Most troubling was the risk adjustment program, a millstone CareConnect could never quite shake, which, despite state and federal efforts to reform the program, continued to cost the company more than it could afford. . .