Land of Lincoln Health, an Obamacare insurer launched three years ago to bring competition to the online exchange in Illinois, is liquidating amid big financial losses.
Dennis O'Sullivan, a spokesman for the Chicago-based startup, confirmed the insurer's closure. “It's unfortunate for the members and for competition,” he said.
Anne Melissa Dowling, acting director of the Illinois Department of Insurance, has asked Illinois Attorney General Lisa Madigan to petition the Circuit Court of Cook County to start the liquidation process.
In a statement, Dowling said her decision was based on Land of Lincoln's financial position after the CMS, which oversees the Illinois exchange, rejected a plan that would have stopped the not-for-profit co-op from having to pay $31.8 million it owes as part of a federal program called risk adjustment.
Land of Lincoln was among nearly two dozen co-ops born out of the Affordable Care Act to make the exchanges more competitive and to lower prices. But co-ops across the country faced big hurdles against the larger, more established insurers with deeper pockets as they all vied for customers who ended up being sicker than projected. More than half of the co-ops folded as their financial losses mounted.
Land of Lincoln, which has nearly 50,000 members, lost $90.8 million in 2015 and reported more than $17 million in losses through May 31.