Another one bites the dust. Illinois’ Land of Lincoln co-op was taken over by state insurance regulators Tuesday and will be liquidated. From the AP:
Illinois regulators took steps Tuesday to shut down Land of Lincoln Health, a 3-year-old startup that lost $90 million in 2015 and more than $17 million through May 31.
Illinois Department of Insurance officials announced they are seeking a court order allowing the state to take over Land of Lincoln Health and prepare the company for liquidation.
The department’s acting director, Anne Melissa Dowling, will work with the federal government to establish a 60-day special enrollment period for Land of Lincoln policyholders to find and purchase new health coverage.
The CEO of Land of Lincoln says, “this is the end.” From the Chicago Tribune:
“It’s a bad day for the marketplace in Illinois and our consumers,” said Jason Montrie, president and interim CEO of Chicago-based Land of Lincoln. “This is the end.”
The shutdown will impact 49,000 policy holders who will have to buy new plans before their current ones expire. Earlier this month, state regulators tried to keep Land of Lincoln from folding by telling it withhold a risk adjustment payment it owed to the federal government. From Modern Healthcare:
The department has ordered the Chicago-based nonprofit to stop renewing policies for small and large businesses, stop selling all new plans without permission and not to pay $31.8 million it owes as part of a federal program called risk adjustment. In that program, the federal government takes money from insurers whose enrollees on the public health exchange are considered low risk and ideally don’t cost much, and gives it to insurers with higher risk enrollees.
That last ditch plan by state regulators didn’t work out. The federal government has refused to adjust the formula it uses to calculate risk adjustment payments. HealthyCT, another co-op which failed earlier this month, also cited the money it was asked to pay under the risk adjustment program as the last straw for its operation.