Will Land of Lincoln members really have to pay deductibles twice?

Emily Burchfield knew that with a 1-year-old daughter, another child on the way and her own business, she’d be busy this year.

But she didn’t realize that one of her biggest tasks would be scrambling to find new health insurance before her insurer, Land of Lincoln, shutters. She’s also grappling with the fact that she won’t get credit for the money she’s already paid toward her deductible and out-of-pocket maximum with Land of Lincoln when she switches insurers in October — just two months before her baby is due.

“I’m just really still so shocked that that’s not considered illegal,” said the 39-year-old psychotherapist from the Lincoln Square neighborhood. “It’s going to be a huge financial burden especially given the fact my partner is unemployed.” Her partner suffered a stroke last year, she said.

About 49,000 other Illinoisans, who also have Land of Lincoln, are in similar situations. But Illinois is not the first state where a so-called co-op — a nonprofit health insurer created under the Affordable Care Act and offered on state insurance exchanges — has failed before the end of the year. And those other states might hold lessons for how Illinois could potentially save Land of Lincoln members from having to pay down two deductibles in one year.

Among other things, insurers were supposed to receive so-called “risk corridor” payments from the federal government to help offset their losses during their first few years. But Congress passed spending bills that kept insurers from receiving the level of payments they had expected. For 2014, insurers asked for $2.87 billion in risk corridor payments but only got $362 million.

Also, co-ops have struggled with Obamacare’s risk adjustment program, under which insurers with healthier customers are supposed to pay money to insurers with sicker customers. The idea was to help insurers with sicker members and deter insurers from seeking out only healthy customers. In reality, however, co-ops often have ended up paying money to big insurance companies, said John Morrison, founder and past president of the National Alliance of State Health Co-ops.

“You’re making David write a huge check to Goliath that puts David out of business,” Morrison said.

A number of other factors also contributed to the demise of co-ops around the country, leaving many Americans, like Land of Lincoln members, in precarious situations.

Lincoln Square writer Paige Worthy already has found another plan on the exchange to tide her over between when Land of Lincoln closes and the new year begins. But it doesn’t include her preferred doctors, and she doesn’t want to put more money toward a deductible.

Worthy, 33, describes herself as relatively healthy and simply hopes not to use any medical services from October through December. She purchased the plan in case of a medical emergency.

“I am praying for wellness (in) late fall, early winter,” Worthy said. “I feel like I’m one of the lucky ones.”

lschencker@chicagotribune.com

Twitter @lschencker

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