The Federal Mandate works to level the playing field while providing care to everyone, including those with pre existing conditions, to avoid insurers "cherry-picking" healthy members. To accomplish this, a portion of the revenue from the companies with healthier members goes to the companies with less healthy members. However, defects in the small-group program have resulted in New York’s smaller, more-innovative insurers like CareConnect to subsidize larger competitors.

The Direct Effect to Northwell CareConnect
 CareConnect has to make a significant transfer of revenues as mandated by the Affordable Care Act.
 To illustrate: Care Connect has approximately 7% in fixed costs, 80% in medical expenses, along with state and federal taxes of 5%. This illustrates that CareConnect is doing well and would generally lead to a slight increase if any.
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However,
 In 2016 with revenues of approximately $700,000,000, CareConnect’s Federal Risk Adjustment liability is $112,000,000
 92% of that revenue transfer is going to Oxford which maintains approximately 55% of the  total NYS market. In the downstate area (which most of us live in) they represent 70% of the market.

Right now, Northwell CareConnect has the most cost effective plans in each of the Metallic Levels. CareConnect with other organizations are trying to have this mandate repealed for the small group marketplace (2‐100 ee’s on the payroll). It is creating a burden on small businesses and their employees along Main Street. If the Federal Risk Adjustment mandate were to be repealed, executives at CareConnect stated they would apply for a minimal increase, if any.

So far the Mandate remains, causing Northwell CareConnect to request withdrawal from the health insurance marketplace. CareConnect operations will continue over the next year as the company works with its customers, businesses and 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.  Optimistically, we are hoping for a change of heart from the ACA. This directly affects hard working New Yorkers trying to obtain quality affordable coverage.

• Insurers have been unsure whether the mandate requiring everyone to have insurance will be repealed.
• Insurers do not know whether the Administration will continue to make payments to compensate them for cost share reduction subsidies given to lower income individuals
• Ultimately insurers will factor in this uncertainty in their premium offerings.
• The ever increasing taxes being buried within the premiums are also creating havoc and in reality are being paid by employers and employees.
• The Federal Risk Adjustment Mandate: This one has really backfired and did not go according to the game plan. It appears it became one of those “OOPS situations. In reality, it is causing one of the major insurers in the NY Market with 18% of the business to exit the health insurance business. The irony is that they were doing very well. The astronomical amount (approx. $112 million) they have to pay because of the Federal Risk Adjustment mandate is not allowing then to be competitive and profitable. This action is causing the most competitive insurance company providing access to quality physicians and hospitals to leave. Northwell CareConnect offered the best price point in the entire marketplace. When comparing apples to apples, the next option is more costly to employees. Once again, small employers and employees get clobbered.​

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