EDITORIAL: Land of Lincoln Health and Obamacare: Promises made, promises broken

July 27--Thousands of Illinoisans heeded federal law and bought health insurance last year via the state's Obamacare exchange. They signed up with Land of Lincoln Health, a state-approved insurer. They paid their premiums and deductibles. Many counted on that coverage to manage chronic illnesses or other long-term treatment.

Now, a kick in the teeth: Land of Lincoln has collapsed. Its customers must scramble for new coverage in an upcoming "special enrollment" period. They will have 60 days to find another plan on the Illinois exchange to cover the last three months of the year.

Wait. It gets worse. Those customers might have to pay higher premiums for that coverage. And they'll have to meet deductible and out-of-pocket payment thresholds all over again. Resetting those out-of-pocket costs likely will be expensive for policyholders with chronic illnesses who have already paid thousands of dollars to meet their deductibles.

Land of Lincoln policyholder Cheryl Mostowski, of Algonquin, under the care of specialists at the University of Chicago for autoimmune disease, tells Tribune reporter Ameet Sachdev that she already has met the $1,350 deductible on her 2016 plan and nearly reached her $3,200 out-of-pocket maximum. "The fact that I now have to pay all deductibles and out-of-pocket costs again is truly unaffordable and unfair," she said. No argument here.

And worse: The new policies likely will include far narrower networks of doctors and hospitals. Thousands of patients could be forced to pay more to stay with their physicians and hospitals or switch to in-network doctors.

Land of Lincoln appealed to thousands of customers because it offered cost-effective coverage with a large network of providers, including Northwestern Memorial Hospital and the University of Chicago Medical Center. By contrast, dominant Blue Cross and Blue Shield of Illinois offers smaller, narrower networks to some customers in an effort to control exploding costs.

Consumer advocates have urged Illinois Department of Insurance acting director Anne Melissa Dowling to let policyholders move to new plans without resetting deductibles and other out-of-pocket payments. But Dowling and other state officials say she doesn't have the power to force insurers to do that. Nor does the state have the money to compensate insurers for their losses if they were to do so.

Dowling has said she is exploring the possibility of marshaling financial or other resources for Land of Lincoln policyholders faced with these additional costs -- especially for longer-term treatments such as cancer care and injury rehabilitation.

We understand that the state can't dictate unfavorable terms for insurers to take on former Land of Lincoln customers. But insurers such as Blue Cross could gain a cadre of loyal customers by giving Land of Lincoln refugees credit for their previous out-of-pocket payments. We hope Blue Cross and other carriers see the benefits in that. One potential incentive for Blue Cross and others to engage the refugees: The Tribune reported Tuesday that Cigna, one of America's largest health insurance companies, plans to sell Obamacare policies in the Chicago area for the first time, starting later this year. That means more competition for existing carriers.

We wish we had a fix for this fiasco. This we know: Washington and Illinois bear responsibility here.

In accordance with federal law, customers bought a state-approved plan with the expectation that it would fulfill its yearlong coverage deal. Dowling notes that federal officials forced state regulators to shutter Land of Lincoln midyear because of its financial problems.

Obamacare created these co-ops to kindle competition among insurers. But if Obamacare's protocols treat Land of Lincoln customers so shoddily -- thanks for doing what we told you to do, now get lost -- who's going to buy policies next year from the seven co-ops, out of an original 23 nationwide, still in business?

Land of Lincoln policyholders played by the rules. Federal and state officials should find a way to help them through this maze.

The law that created these co-ops is deeply flawed. There's more chaos to come. The sooner Obamacare gets a massive overhaul, the better.

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