via the Chicago Tribune:
Obamacare company shutdown leaves customers in a lurch, facing higher costs
July 13, 2016
Ken Sullivan bought health insurance for his family this year from Land of Lincoln Health, a small, nonprofit company in Chicago.
The 52-year-old Chicagoan knew the purchase was a risk because the three-year-old insurer was struggling financially. But he said he didn’t have much choice after Blue Cross and Blue Shield of Illinois eliminated his plan last year and its alternative didn’t include any of his family’s doctors and hospitals.
Now his worst fears have come true.
The Illinois Insurance Department moved Tuesday to shut down Land of Lincoln because of its unstable financial health, leaving about 49,000 policyholders in a lurch. They will lose coverage in the coming months, but neither regulators nor the company have said exactly when.
Policyholders will be able to buy insurance from a different carrier to cover them for the rest of 2016, according to the state Insurance Department. But switching plans is going to cost them.
The co-pays and deductibles enrollees have been paying since January will not transfer to new plans. A new plan will reset deductibles and out-of-pocket maximums paid by consumers.
The final blow came a few weeks ago when the co-op received a $31.8 million bill from the federal government. The company owed that amount to other insurers under a complex formula in the Affordable Care Act, which aims to keep premiums stable by balancing risks among insurers. The company couldn’t afford to pay the bill.
Acting Insurance Director Anne Melissa Dowling tried to intercede on the company’s behalf by suspending the payment until the co-op received more than $70 million in promised federal assistance.
But federal regulators didn’t go along with the last-ditch effort and Dowling began an orderly wind down of company operations to protect remaining assets for policyholders and providers.
Land of Lincoln is the latest casualty in the health-care law co-op program.
Read the full article at the Chicago Tribune