Policyholders who bought from an insurance co-op in Illinois remain upset and confused about the future of their care more than a month after the debt-laden company was ordered to close by insurance regulators.
The Land of Lincoln plan -- in operation for three years following the passing of the Affordable Care Act -- lost $90 million in 2015 and was facing a bill for more than $30 million under a complicated risk-balancing formula among insurers.
Six weeks after Land of Lincoln became the 16th of 23 nonprofit consumer operated and oriented plans (co-ops) to fail, policyholders are still in the dark, in addition to facing an “unfair” extra deductible and other out-of-pocket expenses.
“It’s a mess,” policyholder Cheryl Mostowski recently told Patient Daily. “But it is also very unfair. When you buy a plan, you have to stay in that plan for year. But it is based on promises that this is how much you are going to pay, this is your deductible.”
Coverage under Land of Lincoln ends Oct. 1. As such, roughly 49,000 individuals will have to switch plans for the last three months of the year or go without insurance. They can do so through the federal exchange, www.healthcare.gov, under a special enrollment plan.
This likely means paying another deductible and more out-of-pocket expenses, according to Mostowski, who suffers from an autoimmune disease and needs regular treatment. She has already paid the $1,350 deductible on her 2016 plan and close to the $3,200 out-of-pocket maximum.
Further, Mostowski said, she has no idea what sort of plan she is going to find next year, whether she can remain with her present doctor or be seen by specialists at the University of Chicago. She expects to pay higher premiums.
“I just don’t know what I am going to do at this time,” Mostowski said. “I have to start all over again, along with 49,000 others.”
Land of Lincoln was ordered shuttered in July by the Illinois Department of Insurance.
The insurance company was one of 23 co-ops set up after the passing of the Affordable Care Act. Only seven survive today.
Additionally, it is suing the U.S. government, claiming it set premiums on the understanding it would receive $68.6 million in “risk corridor” funding.
But the “risk corridor” -- designed in Obamacare's early years to shift money from profitable plans to those losing money -- was changed by Congress so that it had to be revenue neutral.
In 2014, too few insurers made profits to cover the losses. Insurance companies wanted $2.87 billion but received $362 million. This hit the smaller co-ops harder than the larger, well-established companies.
At the same time, Land of Lincoln owed $31.8 million to other insurance companies under another formula, this one shifting money from an insurer with healthier customers to those with demonstrably riskier ones.