A struggling Illinois health insurance co-op is suing the federal government, claiming it is being shortchanged $72.8 million in promised payments under the Affordable Care Act.
Chicago-based Land of Lincoln Health filed the lawsuit Thursday in the U.S. Court of Federal Claims in Washington, D.C. At least four other insurers have filed similar claims over the so-called risk corridor payments, a temporary provision of the health care law meant to help unprofitable insurers and stabilize consumer prices during the first three years of the law's new insurance exchanges.
Land of Lincoln's balance sheet has been deteriorating rapidly. The 3-year-old startup lost $90 million in 2015 and $7 million in the first quarter of 2016.
As it fights to remain solvent, Land of Lincoln also announced Thursday it will withdraw from the group market for 2017 and is now informing more than 800 employers with contracts. Land of Lincoln will fulfill its obligations for 2016, but will not renew group policies, said company President and interim CEO Jason Montrie.
It intends to stay in the individual market, where it covers about 42,000 Illinois residents, Montrie said.