(Bloomberg) -- UnitedHealth Group, thelargest U.S. health insurer, said its rates for Obamacareplans in New York may be too low because the failure of a competinginsurer last year might lead to shortfalls in payments designed tostabilize Obamacare markets.

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Read: Carriers debate their future withObamacare

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In states like New York, health insurers participating in thePatient Protection and Affordable CareAct negotiate annually with regulators to set pricesfor coverage.

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UnitedHealth’s rates were set anticipating risk-sharing paymentsdesigned to stabilize the new insurance markets, William Golden,the company’s Northeast Region Chief Executive Officer, said at astate Senate round table Wednesday in Albany.

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If the loss of a participant reduces the funds available toUnitedHealth, the company’s rates in New York’s PPACA market may beinsufficient, Golden said.

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“I have rates that are substantially too low based on risk-adjustment payments not being paid,” he said in the meeting.

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The stabilization payments were thrown into doubt afterregulators began shutting down Health Republic Insurance ofNew York in September because it was likely to become financiallyinsolvent.

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With its failure, Health Republic won’t be able to pay into therisk adjustment program, reducing the funds available toUnitedHealth and other plans in the state.

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UnitedHealth fell less than 1 percent in New York to $116.03 at11:49 a.m.

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State regulators required that UnitedHealth’s New York ratestake into account payments from the law’s risk-adjustment program,Golden said. The program redistributes funds from health insurerswho have low-risk, low-cost patients, to those with less healthy,more expensive customers.

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UnitedHealth requested a 22 percent rate increase for individualPPACA plans. Instead, state regulators allowed the company to boostrates by 1.65 percent. The company also sells business under theOxford brand, which requested a 5.32 percent rate increase, and wasforced to instead cut rates by 12.25 percent.

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The company has said that it should have stayed out of PPACA’sindividual markets until they stabilized. InNovember, UnitedHealth said it would record hundreds ofmillions of dollars in losses related to the business.

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“It was for us a bad decision,” CEO Stephen Hemsley said ata December investor meeting in New York. It’s not clear if thepotential problems in New York are accounted for in the company’spreviously announced anticipated losses.

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