Published in Long Island Business News
In a bid to grow its insurance business, the North Shore-Long Island Jewish Health System’s wholly owned insurer is expanding to new regions and cutting rates.
East Hills-based North Shore-LIJ Care Connect, North Shore-LIJ’s insurance arm, is expanding beyond Nassau, Suffolk, Queens and Staten Island to much of the tri-state area beginning next year. Coverage will include New York City’s five boroughs, Westchester and portions of New Jersey and Connecticut near New York City.
Care Connect is forming alliances with hospitals such as Montefiore Medical Center and Maimonides Medical Center in Manhattan and Wyckoff Hospital in Brooklyn. It also reached deals with Phelps Memorial Medical Center and Northern Westchester Hospital in Westchester, St. Barnabas Health System in New Jersey and Yale-New Haven Health System in Connecticut.
In addition to increasing its reach, Care Connect is dropping small business rates by more than 14 percent as of 2015. Small group rates will drop as much as 19.4 percent in New York City and about 14 percent on Long Island, while rates for individuals slip 6 percent in New York City and remain flat on Long Island.
“If you’re going to have a narrow network like we have and you want to attract members, you have to have the appropriate pricing,” North Shore-LIJ Care Connect CEO Alan Murray said. “You can’t charge more for a smaller network.”
Some companies that signed on with Care Connect believe they’re already saving at current rates.
Raymond Haller president of Williston Park-based brokerage Haller-Zaremba & Co., switched to Care Connect in June. He said he’s saving at least $7,000 annually over his previous insurer with policies that have lower copays.
“A lot of people are hesitant in taking that first step, that first jump,” Haller said. “Even though their costs are rising, everyone has that skepticism at first.”
Other issues may be holding back companies and individuals from signing with Care Connect, which covers a network of North Shore-LIJ doctors. Haller said his partner found one of his principal doctors wasn’t on the plan.
“That’s a concern,” Haller said. “For some people, it’s not a big issue; for some people, it is.”
Care Connect is adding doctors as well as geography, while finding its results are in line with actuarial predictions.
About 60 percent of the 10,000 individuals who signed up did so through the state exchange, while the remaining 40 percent signed up through the open market.
“That is starting to shift as the year progresses,” Murray added. “People are coming directly to us not through the exchange.”
Murray believes more people will buy policies through exchanges, generating business for Care Connect and others, adding that Care Connect is doing what it needs to grow, bringing more doctors on board to grow networks, while holding rates down.
“I’m looking to more than double my membership within the next year,” he said. “Our model is working. Part of our vision is to provide affordable healthcare.”
About 95 percent of its small group members – 400 groups and about 1,500 people – are through the open market and not the state exchange.
Lower rates could lead to higher levels of interest. But some said only time will show how good a deal Care Connect can be.
“You have to make sure it’s not a marketing ploy to steer business to them,” Haller said of rate reductions. “I’m hoping it’s a legitimate, honest move.”