The Illinois Department of Insurance is binding the hands of Land of Lincoln Health in an effort to prevent the struggling Obamacare startup from folding.
The department has ordered the Chicago-based not-for-profit 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 risk-adjustment program. Making the payment could force the co-op to close.
“A midyear liquidation would trigger marketplace disruption and extreme financial harm” to Land of Lincoln’s 49,000 enrollees if their policies were canceled midterm and before open enrollment for 2017 begins in the fall, Anne Melissa Dowling, acting director of the Insurance Department, wrote in a June 30 letter to Kevin Counihan. He oversees the exchanges for the CMS.
Jason Montrie, president and interim CEO of Land of Lincoln, said he views the state’s decision as a way to protect consumers. “We feel good about the steps the department is taking,” Montrie said, adding that he’s “absolutely concerned” about the impact certain Obamacare programs meant to stabilize the plans are having on insurers.