Illinois Shutters Failing ‘Obamacare’ Insurer

     CHICAGO (CN) — Crippled by a nearly $80 million loss in federal funding, the only nonprofit insurer formed in Illinois under the federal health care law shuttered Thursday.
     The co-op, short for consumer operated and oriented plan, went operational in 2013 with a $160 million loan from the U.S. government. Co-ops were meant to increase competition between insurance companies and lower costs under the AFA.
     “It’s a bad day for the marketplace in Illinois and our consumers,” Land of Lincoln Health CEO Jason Montrie told the Chicago Tribune. “This is the end.”
     Land of Lincoln’s collapse came Thursday via rehabilitation proceedings initiated by Anne Melissa Dowling, the state’s acting director of insurance.
     The failing insurer had seen a loss of more than $90 million last year, and it owes a payment of $31.8 million to other insurers as part of the risk-balancing stipulations of the Patient Protection and Affordable Care Act.
     The ACA’s temporary risk-corridor program collected funds from insurers that were doing well and distributed them among those that weren’t in an attempt to minimize the new risks that would come with insuring the previously uninsured and underinsured.
     Funds owed to floundering insurers far surpassed what was collected though, and
     Congress put risk-corridor funding in jeopardy with the passage of an appropriations act in December 2014.
     Land of Lincoln sued the U.S. government last month, saying it set its insurance premiums below what it would have if it knew its money wasn’t coming.
     Dowling’s July 14 complaint for rehabilitation says “the loss in risk-corridor funding resulted in a projected loss to Land of Lincoln in excess of $68.6 million,” as of March 31, 2016.
     Dowling said she will take control of the operations of Land of Lincoln to ensure its claims are being paid, its debts are collected and its assets liquidated.
     Judge Diane J. Larsen entered the rehabilitation order the same day the lawsuit was filed, leaving 49,000 Illinois residents without insurance.
     According to the state Department of Insurance’s website, those enrolled in a Land of Lincoln’s plan will keep their coverage until a 60-day period is established for them to pick a new carrier.
     Land of Lincoln has not returned an emailed seeking comment, but its interim CEO Montrie voiced his disappointment over the outcome in an interview with the Chicago Tribune.
     “It’s frustrating that our consumers are being put in harm’s way,” Montrie said.

%d bloggers like this: