Press Release

CareConnect Reaffirms Commitment to Highly Competitive Rates Despite Government-Mandated Increase

Risk Adjustment Policy Drives Prices Up in New York Market, But Health Insurer’s Innovative Business Model Continues to Benefit Individuals, Small Businesses

Terry Lynam, Northwell Health, 516-316-2389,

August 5, 2016 - 9:35 am

East Hills, New York, August 5, 2016—New York’s Department of Financial Services (DFS), the final arbiter of health insurance premiums in the Empire State, today approved a 23 percent increase for CareConnect in the small-group market, significantly more than the 17 percent requested by the rapidly growing insurance provider. In the individual market, CareConnect asked for and received a 29 percent increase.

Owned by Northwell Health, the state’s largest health care system, CareConnect is one of the nation’s fastest growing insurers with a more than 350 percent spike in new members over the past year. Despite the rate hikes, CareConnect’s premiums are among the most affordable on the market for individuals and small groups. Unlike some of its competitors, the company continues to offer its more than 100,000 members access to the same network of 20,000 providers throughout the metropolitan area as before.

A major portion of the current rate increase for small group plans can be attributed to the Federal Risk Adjustment program, which includes flawed methodology that is adversely affecting nearly all insurers on New York State’s health exchange. Without risk adjustment fees, CareConnect’s proposed increase would have been significantly lower.   

DFS is working to find a solution that balances the requested increases with the risk adjuster program payments.  Recognizing the unique characteristics of the New York health insurance market, DFS is determining how the program can be implemented in the long term to protect competition and the state’s consumers.

“We are greatly disappointed that the state did not address underlying problems with the risk adjustment program before the 2017 rates were enacted because we believe DFS has the authority to make the necessary changes,” said Alan J. Murray, president and CEO of CareConnect. “To protect New York’s small businesses and families against future rate hikes, action is needed now to resolve the program’s flawed methodology.”

While the risk adjustment program was originally designed by the federal government to protect insurance companies enrolling a higher-risk population, it assesses the New York population as one of the sickest in the country despite overwhelming evidence to the contrary.  Moreover, the risk adjustment program results in a significant reduction in competition throughout the unique New York market by requiring almost all insurance companies except the largest carrier to pay into the program.  Significant modifications are needed to ensure a level playing field for all carriers and affordable pricing for consumers.

“The risk-adjustment program is having disastrous consequences in the New York market, driving double-digit rate increases that essentially place an unfair tax on small businesses in New York – and it is unsustainable,” said Mr. Murray. “In the short term, it raises the premiums of some of the more-affordable insurers in the market, and in the long term, it runs the risk of driving innovative companies out of business. CareConnect is working with DFS and relevant parties to do everything it can to keep our members’ rates low and give New Yorkers what they deserve – excellent health care at fair and affordable prices.”

About North Shore-LIJ CareConnect Insurance Company, Inc.

The first provider-owned commercial health plan in New York State, CareConnect was created by Northwell Health (formerly North Shore-LIJ Health System) to make it easy for people to get and stay healthy. Its innovative model is designed to provide access to care that’s both excellent and affordable. CareConnect was founded in 2013 and offers a variety of plans for individuals, families, and businesses. It is headquartered in East Hills, New York. For more information, visit