Yet another nonprofit health insurance cooperative set up under the Affordable Care Act is getting ready to shut its doors.
The Illinois Department of Insurance announced Wednesday it is seeking to take over Land of Lincoln Health, a three-year-old startup with 49,000 policyholders in the state. Regulators are seeking a court order to assume control of the group and prepare it for liquidation.
The company, which is among just a handful of remaining ACA co-ops in the country, lost $90 million in 2015 and more than $17 million through May 31 of this year.
Land of Lincoln Acting Director Anne Melissa Dowling will work with the federal government to establish a 60-day special enrollment period for company policyholders who will lose their coverage and need to find a new health plan.
Agents with Land of Lincoln policyholders should ensure their clients continue to pay their premiums during the transition in order maintain coverage. Healthcare providers will continue to honor their contracts for patients.
The move to close Land of Lincoln followed a maneuver last month by Dowling to block the company from paying a $31.8 million bill to the federal government. Dowling wrote in a June 30 letter that the co-op should not pay the bill, which it owes under the ACA’s risk corridor program, until the feds pay Land of Lincoln nearly $73 million in promised funds, which Congress later axed.
The refusal to pay was fruitless, however, as the Centers for Medicare and Medicaid Services would not suspend the company’s risk corridor liability.
“It’s an unfortunate day for Land of Lincoln members and for competition in the Illinois insurance market,” Land of Lincoln spokesman Dennis O’Sullivan said. “It’s unfortunate that CMS chose not to work the state of Illinois as it went above and beyond with a plan to help consumers.”
Land of Lincoln was one of the 23 co-ops established under the ACA, and is the fifteenth to close its doors as financial hardships in the health insurance landscape continue to pressure insurers. Just eight of the nonprofit companies remain.
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