Illi­nois Oba­macare plan to fold af­ter 3-year run

Modern Healthcare - - REGIONAL NEWS - —Kris­ten Schorsch, Crain’s Chicago Busi­ness

Land of Lin­coln Health, an Oba­macare in­surer launched three years ago to bring com­pe­ti­tion to the on­line ex­change in Illi­nois, is liq­ui­dat­ing amid big fi­nan­cial losses.

Den­nis O’Sul­li­van, a spokesman for the Chicago-based startup, con­firmed the in­surer’s clo­sure. “It’s un­for­tu­nate for the mem­bers and for com­pe­ti­tion,” he said.

Anne Melissa Dowl­ing, act­ing di­rec­tor of the Illi­nois Depart­ment of In­sur­ance, has asked Illi­nois At­tor­ney Gen­eral Lisa Madi­gan to pe­ti­tion the Cir­cuit Court of Cook County to start the liq­ui­da­tion process.

In a state­ment, Dowl­ing said her de­ci­sion was based on Land of Lin­coln’s fi­nan­cial po­si­tion af­ter the CMS, which over­sees the Illi­nois ex­change, re­jected a plan that would have stopped the not-for-profit coop from hav­ing to pay $31.8 mil­lion it owes as part of a fed­eral pro­gram called risk ad­just­ment.

Land of Lin­coln was among nearly two dozen co-ops born out of the Af­ford­able Care Act to make the ex­changes more com­pet­i­tive and to lower prices. But co-ops across the coun­try faced big hur­dles against the larger, more es­tab­lished in­sur­ers with deeper pock­ets as they all vied for cus­tomers who ended up be­ing sicker than pro­jected. More than half of the co-ops folded as their fi­nan­cial losses mounted.

Land of Lin­coln, which has nearly 50,000 mem­bers, lost $90.8 mil­lion in 2015 and re­ported more than $17 mil­lion in losses through May 31.

Mar­ket­place nav­i­ga­tors help res­i­dents shop for in­sur­ance dur­ing an en­roll­ment event in Chicago.

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