NEW HYDE PARK, N.Y. (CBSNewYork) — Salvatore Messina is suddenly worried about his family’s health care coverage.
The Hicksville locksmith’s insurer, CareConnect, just announced it will be shutting down and withdrawing from the state insurance market, catching many off-guard.
“I wake up to (the news). I’m very devastated, shocked,” Messina told CBS2’s Jennifer McLogan. “I got four kids. They have to get checkups and everything. I don’t really know what to do right now.”
CareConnect is telling its 126,000 policyholders not to panic.
“We want everyone to understand that we will not leave anyone high and dry,” said Richard Miller, deputy chief financial officer of Northwell Health, which owns CareConnect.
The insurer says all policyholders will remain covered while they transfer to new health providers.
CareConnect was created in 2013 as the state’s first commercial insurance company opened by a health system. When the Affordable Care Act, also known as Obamacare, stumbled amid political bickering and a failed repeal, CareConnect couldn’t swallow continued financial losses.
“As you know, there’s quite a bit of uncertainty in Washington,” Miller explained. “There have been some changes in the rules that were originally in place under the Affordable Care Act.”
The insurer, barely treading water, never received a promised $150 million reimbursement from the federal government while paying out $100 million a year in risk adjustment.
“You have the concerns over what’s going on in Congress in terms of the future of health care and where the next level of legislation is going to go, what changes will be made,” said Richard Vogel, dean of business at Farmingdale State College.
CareConnect says 56 percent of its policyholders are Long Islanders.
As families’ policies expire, CareConnect plans to link them to alternatives.
“I have to, I guess, find different insurance,” Messina said.
Experts told CBS2 other insurers may follow Northwell’s lead and also withdraw from Affordable Care Act state marketplaces due to uncertainty and instability.
CareConnect also hopes to help find jobs for its 200 employees.