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Co-op joins insurers suing U.S. over ACA reimbursements


Illinois health insurance cooperative Land of Lincoln Mutual Health Insurance Co. has become the latest in a string of health insurers to sue the United States over unpaid funds owed to them under the health care law.

The Chicago-based co-op filed a lawsuit Thursday in the Washington-based U.S. Court of Federal Claims alleging it is owed at least $72.9 million in risk corridor payments requested for 2014 and 2015, according to the lawsuit.

The government has paid Land of Lincoln only $550,782 in risk corridor payments so far, the lawsuit states.

The U.S. Centers for Medicare and Medicaid Services could not immediately be reached for comment.

The risk corridor program established under the Affordable Care Act is meant to help protect health insurers from extreme losses during the early years of the public insurance exchanges.

But the program hasn't worked quite as planned. Not enough insurers paid into the program to cover the losses of insurers who experienced high claims. As a result, CMS said it would pay only 12.6% of the funds insurers requested for 2014 losses, with the rest paid in 2015 and 2016 if necessary.

CMS has not yet announced the payments it will make for 2015 losses.

Insurers are itching for the funds, however. The majority of insurers have lost money during the first two years of the health insurance exchanges, and 13 of 23 co-ops established by the health care law have closed their doors.

Land of Lincoln Health is struggling: It lost $90 million in 2015 and $7 million in the first quarter of 2016, according to a report by the Associated Press.

At least six insurers and co-ops have filed lawsuits against the federal government over failure to make promised risk corridor payments, including Portland, Oregon-based insurer Moda Health Plan Inc., Blue Cross Blue Shield of North Carolina, Pittsburgh-based Highmark Inc., and the failed CoOportunity Health, which was based in West Des Moines, Iowa, and Health Republic Insurance Co. of Oregon, which was based in Lake Oswego.

Another, Baltimore-based co-op Evergreen Health Cooperative Inc., sued the federal government last week over the health care law's risk adjustment program, another safety net for insurers.

Evergreen Health alleged that it estimates it will be forced to pay about $22 million into the program for 2015, which equals about 26% of its 2015 premium revenue, according to the lawsuit. That will place Evergreen at risk for falling below reserve requirements and “from using premium revenue to improve the benefits it provided to its members,” the lawsuit states.

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