Acting agency Director Anne Melissa Dowling spoke of this issue, saying, ‘We are so disappointed in the decision from CMS’.
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“You create an incentive for insurance companies to offer lousy coverage to the sick so that the sick people go someplace else and bring down their competitor’s bottom line”.
The Illinois Insurance Department moved on Tuesday to shut down Land of Lincoln Health because of its unstable financial health, which could hit 49,000 policyholders coverage in the coming months.
“LLH will temporarily continue to operate under the director’s supervision” if the circuit court enters what’s called an order of rehabilitation, the statement from the state Insurance Department said.
A spokesman for CMS declined to comment. The company is also required to pay other insurers $31.8 million under the Affordable Care Act.
The Illinois Department of Insurance is taking measures to shut down the health insurance co-op, which has 49,000 policy holders in Illinois, after the company suffered $90 million in losses previous year. More than half of the co-ops nationwide folded as their financial losses mounted. Its biggest competitor was Blue Cross & Blue Shield of IL, which dominated the online marketplace and is the largest insurer in IL.
That didn’t work, according to the IL department’s news release, which said the federal Centers for Medicare and Medicaid Services would not suspend the company’s risk adjustment program liability. Dowling wrote in a June 30 letter that the co-op should not pay the bill, which it owes under the ACA’s risk corridor program, until the feds pay Land of Lincoln almost $73 million in promised funds, which Congress later axed. That’s how much the carrier claimed it was owed as part of the federal risk corridor program.
Cannon says infighting between Congressional Republicans and the Obama Administration is the reason for Land of Lincoln’s unbalanced books.
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Kristen Schorsch writes for Crain’s Chicago Business, a sister publication of Business Insurance.
