Land of Lincoln Health's looming exit from the Obamacare exchange, announced July 12, takes Illinois a step closer to a PPO-free world. The Chicago not-for-profit offered one of the broadest so-called PPO plans on the market—part of its appeal and, potentially, a factor in its demise.
The Obamacare plans that remain will likely include fewer doctors, fewer prominent academic medical centers and fewer plans that offer the flexibility PPO users have come to expect.
The shrinkage mirrors a national trend: As insurers aim to control costs and squeeze profits out of the sicker-than-expected consumers flooding the federal marketplace, narrow HMO-style plans are outnumbering PPOs, or preferred-provider organizations, which give subscribers access to a broader array of doctors and hospitals and thus can be more expensive to operate than their more strict HMO rivals.
In Illinois, the amount of HMO plans offered since the exchange launched three years ago has increased nearly fourfold, while there are nearly a third fewer PPO plans available, according to data from HealthCare.gov and Avalere Health, a health care consultancy based in Washington, D.C.
“Health plans are trying anything they can to better manage this population,” says Avalere senior manager Chris Sloan.
Don't expect 2017 to be different, especially as national insurers that sell plans to Illinois consumers look to consolidate.
Backed by $160 million in federal loans, Land of Lincoln was one of nearly two dozen health insurance co-ops born out of the Affordable Care Act. They were created to give consumers and small businesses an alternative to insurance industry giants and to ultimately make health insurance cheaper by competing for customers.