Illinois insurance regulators are seeking the rehabilitation of a failing health insurance co-op that the department previously attempted to rescue.
Anne Melissa Dowling, Acting Director of the Illinois Department of Insurance, has asked the Illinois Attorney General to petition the Circuit Court of Cook County, Illinois, for an Order of Rehabilitation for Land of Lincoln Mutual Health Insurance Company (LLH).
Dowling acted on July 12 to close the doors at Land of Lincoln due to its precarious financial position. The Associated Press reported that the three-year-old startup lost $90 million in 2015 and more than $17 million through May 31.
In June, Dowling wrote in a letter to the federal government that she had ordered LLH not to pay a $31.8 million bill from the federal Centers for Medicare and Medicaid Services (CMS) until it gets the more than $70 million it’s owed by the federal Risk Corridor Program.
But the CMS has refused to allow the suspension of LLH’s federal Risk Adjustment Program liability, the Illinois Department of Insurance reported.
LLH will temporarily continue to operate under supervision and will continue paying policyholder claims while the Dowling works with CMS to establish a 60-day Special Enrollment Period for LLH’s policyholders to obtain new health care policies. Regulators will also prepare the company for liquidation.
In order to maintain their health coverage, LLH policyholders must continue to pay their premiums and providers must continue to honor their contracts for service to LLH, the department said.
One of 23 non-profit co-ops established under the Affordable Care Act, Land of Lincoln has 49,000 policyholders. Of the 23 original co-ops, 13 have closed, the AP reported.
The co-ops were sponsored by CMS to increase competition among insurance companies in an effort to lower prices for consumers.
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