A federal judge has denied a demand from a health insurer that would prevent New York state regulators from redistributing federal risk adjustment funds to other insurers while the dismissal of their lawsuit against the state is appealed.

U.S. District Judge John Koeltl of the Southern District of New York said in a decision that a potential $65 million loss to United HealthCare is such a small fraction of its revenues that it may bear the cost of the regulation. He reasoned that without the rule, harm done to the insurance market may be greater.