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When Health Insurers Close, What Happens to Customers' Deductibles?

A large insurer on Illinois' Obamacare exchange has decided not to credit former Land of Lincoln members for money they've already paid toward their deductibles despite a request from the state to consider doing so.

By Lisa Schencker

A large insurer on Illinois' Obamacare exchange has decided not to credit former Land of Lincoln members for money they've already paid toward their deductibles despite a request from the state to consider doing so.

Blue Cross Blue Shield of Illinois has decided it cannot waive deductible or out-of-pocket costs for Land of Lincoln members who may join Blue Cross in October, said Blue Cross Blue Shield of Illinois spokeswoman Dana Holmes on Monday.

"It's just not a sustainable model," Holmes said. "It's not something we're in a position to do."

Spokespeople for Harken Health, Coventry Health Care of Illinois and Aetna declined to comment to the Tribune last week on whether they would credit Land of Lincoln members for payments already made toward their deductibles. Spokespeople for UnitedHealthcare and Humana did not respond to requests for comment last week.

Land of Lincoln, a so-called co-op health insurer on the state exchange, will shut down after the end of September because of financial issues. Its 49,000 Illinois members have to get new insurance coverage for October, November and December. They will likely have to start from zero again on their deductibles and out-of-pocket max payments -- in some cases costing them thousands of additional dollars.

In at least two other states where co-ops have collapsed, Oregon and New York, remaining insurers agreed to credit co-op members for payments already made toward deductibles.

The nonprofit co-ops were established under the Affordable Care Act to create competition on the individual insurance exchanges. They've faced enormous financial pressures, and only seven of the original 23 remain.

The Illinois Department of Insurance did not immediately respond to a request for comment Monday, but it has said it does not have the power to force insurers to credit Land of Lincoln members for deductibles.

Holmes noted that Blue Cross Blue Shield of Illinois, like other health insurers in Illinois, already pays into a state guaranty association, which covers the policy obligations of insurers that become insolvent. The association either continues an insurance policy's coverage while paying claims and other policy benefits or it pays for the transfer of policies to another insurance company, according to its website.

The Illinois Life and Health Insurance Guaranty Association has not provided additional details despite multiple requests this week and last week for more information.

(c)2016 the Chicago Tribune

Caroline Cournoyer is GOVERNING's senior web editor.
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