Crain's Health Pulse
August 31, 2016
CareConnect Hints at Potential Exit
The Affordable Care Act's risk adjustment program will cost Northwell Health's CareConnect insurance company $53.2 million for the first half of the year, according to Northwell's actuaries. That sum, which will be paid in 2017, is leading CareConnect to question its long-term participation in New York's individual and small-group exchanges. "While we remain hopeful for a positive outcome in 2017, Northwell may reconsider its future participation in certain insurance products or the insurance market overall if a viable solution is not put into place," Northwell Health President and Chief Executive Michael Dowling and CareConnect President and Chief Executive Alan Murray said in a joint statement. CareConnect more than tripled its net premium revenue through June 30, to $174.6 million, with 97,175 members. The insurer, which is urging regulators to fix the risk adjustment program, lost $46 million in the first half of the year. Meanwhile, Northwell Health as a whole remained profitable, reporting $66.5 million in operating income, a 26.1% improvement from last year. Operating revenue increased 14.6% to $4.82 billion, and operating expenses rose 14.4% to $4.76 billion, according to unaudited financial statements and management's discussion of financial results. —J.L.
August 30, 2016
Northwell Health reported an operating income of $66.5 million through the first six months of 2016, up from the $52.7 million the system reported for the same period in 2015. ...The report also states that CareConnect, the insurance arm of Northwell, expects to lose $110 million in 2016, in large part because of the Affordable Care Act’s controversial risk adjustment program. If changes aren’t made to the program, CareConnect management, according to the financial report, would “reconsider continued participation in the insurance market, or specific insurance products.”