Northwell Health, a health insurer in New York, has announced it is dropping out of the Obamacare exchanges due to bankrupting costs, the New York Post reported.
The health insurer said it is exiting the exchanges due to Obamacare's risk-adjustment payments and Congress, which hasn't been able to fix it.
The company owed $112 million for a risk-insurance pool last year, which was designed to help insurers with costlier and sicker enrollees. The company would owe $100 million on these types of payments next year.
"The high payments were bankrupting CareConnect—formed in 2013—and becoming a financial drain on its parent company, Northwell," the article states. "The payments to the risk-adjustment pool accounted for 44 percent of CareConnect's revenue in 2016."
The CEO said this path was financially unsustainable and the regulations have made the market unstable.
"It has become increasingly clear that continuing the CareConnect health plan is financially unsustainable, given the failure of the federal government and Congress to correct regulatory flaws that have destabilized insurance markets and their refusal to honor promises of additional funding," said Michael Dowling, CEO of Northwell. "The continuing uncertainty in Washington about the future of the ACA, intractable regulatory problems and the federal government's broken promise of so-called ‘risk corridor' payments to insurers provide us with no viable path to profitability in the foreseeable future."