About one-third of the individual members of failed insurer Land of Lincoln did not buy new health coverage on the state’s Obamacare exchange as of last week’s deadline, according to the Illinois Department of Insurance.
But that may not mean they are uninsured. Former members began receiving letters in the past few days — after the Friday deadline for securing uninterrupted Obamacare coverage through other companies — saying they may be entitled to coverage through a state entity.
It is the latest uncertainty for former Land of Lincoln members after the July announcement that the insurer would shut at the end of September due to financial struggles. Land of Lincoln had 49,000 members.
About 35 percent of Land of Lincoln’s individual members did not purchase new coverage on the exchange by Friday. Some may have bought plans from insurers off of the exchange or took coverage offered by a spouse’s employer. People who buy insurance off of the exchange aren’t eligible for federal subsidies to help offset the costs of their premiums.
Some may have opted to forgo insurance for the rest of the year, despite the Affordable Care Act’s requirement that all Americans have health insurance or pay a fine.
However, if they’re up to date on their Land of Lincoln premiums, members who failed to buy insurance may still be covered by the Illinois Life and Health Insurance Guaranty Association, a state-created association of insurance companies formed to protect against insurance company failures, the department said. To get the continued coverage, they must also pay their full October premium to Land of Lincoln by Oct. 15, and not have purchased other health insurance.
That association’s coverage doesn’t pay more than $500,000 for the health expenses of any individual and has limited in-network providers, meaning bills for health care services likely will be higher. Also, those with the coverage are not eligible for federal subsidies to offset the cost of premiums.
Department of Insurance spokesman Michael Batkins said in an email that the department disclosed before Friday’s deadline that the guaranty association could cover Land of Lincoln members for the rest of the year if they didn’t buy other coverage. But that wasn’t clear to many until after the letters started arriving this week.
“I think that’s created a lot of confusion for the people who received (the letter) yesterday,” said Jeannine Martin, a former Land of Lincoln member and Evanston resident who started a Facebook group dedicated to Land of Lincoln members.
Martin said she suspects many members, like her, bought health insurance for the rest of the year off the exchange. Some of those people now likely are wondering whether they were wrong to buy other insurance, she said.
Mark Gurda, president of Northbrook-based insurance agency Castle Group Health, said he thinks many members who didn’t buy exchange-based coverage for the rest of the year might have bought bare-bones, short-term, off-exchange plans that might not meet the Affordable Care Act’s coverage requirements. He also thinks others are going without coverage.
Former Land of Lincoln members may still buy health plans on the exchange, but if they do so now, their coverage likely won’t start until Nov. 1, Batkins said.
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