One of the biggest hospital systems in New York has announced that it will be closing its health insurance division. This is a division that has been operational for the last four and a half years. Beyond normal insurance covers, the insurance was also issuing the troubled Obamacare packages. The insurance division was closed due to financial losses that had been realized for the last six months. In a statement, the company said that most of these loses were as a result of the uncertainty and inaction surrounding Washington. Before the department closed down, it had a subscription of over 126,000 New York residents. All these subscriptions were under a department known as CareConnect Insurance Co. The insurance provider announced that the current subscribers will have to buy subscriptions elsewhere when the current Northwell Health expires next year. This information was brought to light by chief executive officer Michael J. Rowling who said that CareConnect has been making losses for a while. The inability to make profits is the sole reason why the insurance system has shut down. Michael J. Downing is also the president of the company. He further emphasized that continuing running CareConnect would hurt the company financially in the long run.
He noted that these problems have arisen from the failure of the Congress and the federal government to take care of the regulatory flaws that have made the market unstable. He also mentioned that the federal government had refused to make the additional funding as it had earlier committed. He said that about 13 percent of their clients purchase insurance premiums through the Affordable Care Act. Moreover, most of these clients happen to be small businesses meaning that they have their own financial demands. The current situation in Washington only complicated things for most of their customers. According to the spokesman of the company known as Terence Lynam, the decision to close the insurance system was driven by two factors. The first factor was the inability of the Obamacare to implement the risk adjustment policy. This is a policy that is meant to protect new players in the market against cherry-picking customers. In layman’s language, this is a policy that is supposed to ensure that insurance companies with healthier clients get to transfer some money to companies with sicker patients. The second factor according to the company is the financial blow that has been brought about by the inability of Congress to make subsidizing payments.