- Illinois health insurance co-op Land of Lincoln Health launched a lawsuit against the federal government last week over the more than $70 million it says it is owed under the Affordable Care Act's risk corridors provision.
- The government's failure to provide insurers the originally promised funding to help stabilize the market in its first years has left Land of Lincoln Health in "severe financial distress," the insurer's president and interim CEO, Jason Montrie, told the Chicago Tribune.
- Land of Lincoln Health's lawsuit follows similar ones this year from Health Republic Insurance, Highmark, and Blue Cross and Blue Shield of North Carolina and Moda Health Plans.
Though the mounting number of lawsuits adds visibility and some pressure over the issue, those insurers taking legal action are just a small number of those who were affected by the unpaid insurer subsidies. Among the state co-ops alone, a dozen of the original 23 have folded.
Land of Lincoln reported losses of $90.8 million for 2015 and $7.1 million for the first quarter of 2016. The insurer said it set its premiums lower than it would have without the promised risk corridor funding, and has had to limit its business as a result. It stopped offering new group policies in late 2015 and will entirely end its group business later this year.
"Every insurer went in understanding that the first few years would have a lot of volatility," Montrie told the Tribune. "When one of the primary mechanisms designed to help stabilize the market is removed, it creates a lot of damage."