“Land of Lincoln Health’s insurance coverage for its individual enrollees will end Oct. 1, according to the Illinois Department of Insurance.
The agency posted the news on Land of Lincoln’s website. A green banner now greets visitors to the website with the headline, “Important notice to all members” with a link taking them to information about the Chicago-based insurer’s impending shutdown. The notice comes a week after the agency moved to seize control of the financially troubled Chicago-based insurer.
The failure of Land of Lincoln has triggered a “special enrollment” period under the federal Affordable Care Act that will allow the insurer’s approximately 39,000 individual enrollees to pick a new plan for the last three months of the year on Healthcare.gov, the federal health insurance marketplace. The notice advised employers who purchased group coverage from the company to contact their insurance agent or broker to explore their options. Land of Lincoln has about 10,000 group enrollees.
According to the notice, the special enrollment period will run from Aug. 2 through Sept. 30, for coverage starting on Oct. 1. There will be a second enrollment period from Oct. 1 through Nov. 29, for coverage starting on the first of the following month.
The notice warns policyholders that if they wait until Oct. 1 to buy a new health plan there will be a gap in their insurance coverage.
The interruption of coverage is causing chaos for Land of Lincoln policyholders. They face the prospect of losing their doctors and higher monthly premiums.
Land of Lincoln is a 3-year-old company that is one of the nonprofit cooperatives created under the federal health law, also known as Obamacare, to inject competition into state insurance marketplaces.
Land of Lincoln was one of three insurers that sold 2016 plans in every county in the state, and it was one of a handful of insurers that still offered a PPO network for Affordable Care Act plans. PPOs, or preferred provider organizations, generally feature the biggest selections of doctors and hospitals. In some counties, Land of Lincoln offered the lowest-cost plans.
In addition, new coverage means Land of Lincoln customers must meet deductibles and out-of-pocket payments all over again. Deductible and coinsurance payments, the share of medical costs a policyholder is responsible for after meeting the deductible, made under a plan with Land of Lincoln will not transfer to the new policy.
Land of Lincoln policyholders in Cook County will have only two choices for broad PPO networks on the Illinois exchange for the remainder of the year, Harken Health and Coventry Health Care of Illinois, according to insurance brokers. In collar counties, Coventry will be the only alternative. Coventry has the most expensive plan on the Silver tier.
After losing money on its Affordable Care Act plans in 2014 and 2015, Blue Cross and Blue Shield of Illinois discontinued its broadest PPO plan for individuals on the exchange in 2016 to rein in costs. Blue Cross offered a smaller PPO network that didn’t include popular academic medical centers at Northwestern University and University of Chicago, as well as hospital chains like NorthShore University HealthSystem. The decision sent Blue Cross PPO policyholders to plans sold by Land of Lincoln and others.
Land of Lincoln policyholders may have a hard time finding an independent broker to help them select a new plan during the special enrollment period. Several insurance companies in Illinois have stopped paying broker commissions during special enrollment periods, which has led some insurance advisers to exit the individual market.