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Remember When Land of Lincoln Failed in 2016? The Insurer Now Has a Case Before the U.S. Supreme Court
Posted on: 7/1/2019

In 2016, the Illinois Department of Insurance (DOI) closed down the Illinois-based health insurance co-op Land of Lincoln, which had been hemorrhaging financially since 2015.

Fast forward to 2019 and the U.S. Supreme Court recently agreed to hear a case brought forward by the defunct health insurer.

Land of Lincoln asserts that the federal government still owes the insurer $70 million through a "risk corridor" program, put in place by the Affordable Care Act (ACA) and designed to bail out plans that might struggle in the early and uncertain years of the insurance exchanges. However, Congress had since passed spending bills that limited the amount of those payments.

The insurer argues that it offered Illinois residents lower pricing in anticipation of receiving that money under the risk corridor program, and when the money didn’t come through, Land of Lincoln had to liquidate.

ISMS is following the current case involving Land of Lincoln and will keep you apprised of any developments in Physician Advocate

Epilogue: Silver lining for patients and doctors

The closure of this exchange plan caused enormous headaches for the plan’s 49,000 Illinois policyholders. Even though the DOI opened a special enrollment period to help them transition to new health coverage, commercial health insurers had been accelerating efforts to “downsize” PPO networks by severely limiting the number in-network health professionals available to patients. This left many Land of Lincoln policyholders in plans that still did not meet their needs.

But these events drove ISMS to spearhead the Network Adequacy and Transparent Act, which was enacted in 2017. This important legislation, designed to protect patients who purchase state-regulated private health plans, went into effect at the beginning of 2019. ISMS is proud to help make sure patients get what they pay for when they buy health insurance!

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