CareConnect’s 126,000 customers face tough decisions

The 126,000 policyholders of Northwell Health’s CareConnect insurance subsidiary face a potentially arduous search for new insurance that covers their doctors and medicines at a time of rising premiums.

New Hyde Park-based Northwell, the largest health system in the state, said last week that it’s closing CareConnect. The company cited uncertainty about the future of Obamacare, and losses in the business.

One quarter of CareConnect’s policies are held by individuals, half the policies are small group coverage (often small businesses with 100 or fewer employees), and another quarter are large group policies. About 66,000 of the policyholders are on Long Island.

CareConnect said it will continue to enroll and renew members until it gets state regulatory clearance to stop doing so.

CareConnect policyholders — particularly those who were happy with the coverage the insurance provided — have extensive homework to do, experts said.

They will “need to be proactive,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. “They need to go on the health exchange market and choose a new carrier. They need to make sure their doctor is on the new network. Are prescription drugs covered the same way on the new plan, or does the formula change? This could be disruptive.”

Prescription drug prices can vary widely on different insurance plans, said Paul Macielak, president and chief executive at Albany-based New York Health Plan Association, a trade organization that represents most health plans in the state.

“If I’m with CareConnect and a drug I’m taking is on their preferred list, I may have a $30 monthly copay,” Macielak said. “If the new insurer doesn’t have that drug on a preferred list, my copay could escalate to $60 or $70 per month.

“These charges go beyond the premium increases,” he added.

Obamacare individual insurance premiums have risen by about 14 percent annually in New York, while group policies historically rise slightly less than 10 percent each year, Macielak said.

Individual market insurance rates in New York are slated to go up 14.5 percent next year, while small group rates are scheduled to go up 9.3 percent, according to the New York State Department of Financial Services.

Macielak predicted premiums will keep rising.

“Frankly, health insurance premiums reflect the cost of health care, which continues to go up,” he said.

The good news for policyholders is that there is a robust marketplace for health insurance in New York. Unlike some other states, where the number of Obamacare providers is in the low single digits, New York has 14 individual market and 19 small group market insurers, according to statistics compiled by the Kaiser Family Foundation, a nonprofit that focuses on health care policy.

Only Wisconsin, with 15, has more insurers in the individual market, according to Kaiser.

Consumers shopping for a replacement policy must weigh factors, including which doctors participate in the plan, which drugs are covered, and what the overall premium costs.

“Affordability tends to drive people’s choices,” said Sara R. Collins, a vice president at the Commonwealth Fund, a private foundation in Manhattan that supports independent research on health care issues. “It’s the most important criterion. Everyone should be looking at options and the premiums.”

Individual policyholders have several months to shop. “Most of the individual policies will [expire] by January or February,” Terry Lynam, a spokesman for Northwell Health, said in an interview. “With the group insurance, it depends on when the policy started. For example, if a small business signed up a month ago, their policy with us will run until next July.”

Not all health insurance closings are smooth. In 2015, about 215,000 New Yorkers were left scrambling when health insurer Health Republic went out of business. Policyholders didn’t have nearly as much time to choose another insurer.

Because CareConnect will honor its contracts, its exit will be “an orderly transition,” Collins, at the Commonwealth Fund, said.

CareConnect was created in 2013 as the state’s first commercial insurance company owned by a health system.

Northwell, the largest private employer in the state, has about 62,000 employees in New York, where it operates 21 hospitals. It has $11 billion in annual revenue.