Land of Lincoln Health Chosen as Illinois' Health Insurance Consumer Oriented and Operated Plan

Application sponsored by MCHC awarded $160 million in federal loans to improve access to care for Illinoisans through quality, affordable health insurance

CHICAGO, Dec. 21, 2012 /PRNewswire-USNewswire/ -- The Metropolitan Chicago Healthcare Council (MCHC) is pleased to announce that Land of Lincoln Health, Inc., a consumer oriented and operated plan, has received approval and $160 million in federal funding from the U.S. Department of Health and Human Services, and will apply for state licensure to offer high-quality, affordable health insurance to individuals and small businesses in Illinois.

"MCHC is proud to have played a role in bringing a health insurance consumer oriented and operated plan to the State of Illinois," said Dan Yunker, MCHC senior vice president and CFO. "By innovating the design of insurance products available to consumers, Land of Lincoln Health will pave the way for pioneering new collaborations to enhance quality of care, reduce cost and embrace health care connectivity for the benefit of the people of Illinois."

Land of Lincoln Health is the first and only federally approved consumer oriented and operated plan in Illinois and will be applying to the Illinois Department of Insurance to become a mutual insurer in the state. As a member-run organization, Land of Lincoln Health will offer all Illinoisans an insurance option designed to meet their health needs and family budgets, all in the communities in which they seek care.

"Land of Lincoln Health will redefine the insurance landscape in our state, providing consumers with reasonably-priced, patient-centered health insurance," said Kevin Scanlan, chairman of the Land of Lincoln Health Formation Board and MCHC President/CEO. "This will ultimately change the way that patients, physicians and insurance providers work together in Illinois." Scanlan is a nationally-recognized health care executive with more than 35 years of experience and provides executive leadership for the Land of Lincoln Health Formation Board. He has been on both sides of health insurance in Illinois, both as a provider and a purchaser.

Individuals and businesses can purchase coverage through Land of Lincoln Health via the Illinois Health Benefits Exchange, which is expected to be operational by 2014.

"Land of Lincoln Health offers a new and vital option for small employers who will be pursuing group health coverage for their employees in this new world of health insurance in 2014," said Laura Minzer, executive director of the Illinois Chamber of Commerce Healthcare Council and member of the Land of Lincoln Health Formation Board. "Availability of choice is a very important element to the small group health insurance market and consumer oriented and operated plans present the employer community with a great opportunity to address rising health care costs."

The Patient Protection and Affordable Care Act pledged $3.8 billion in funding loans to assist in establishing consumer oriented and operated plans (nonprofit, member-run health insurance organizations) in every state. The federal funding awarded to Land of Lincoln Health, which is required to be repaid to the federal government, will assist with start-up costs and provide the reserves necessary to obtain licensure by the State of Illinois as a mutual insurance company. 

Additional Background

The Patient Protection and Affordable Care Act pledged $3.8 billion in funding loans to assist in establishing consumer oriented and operated plans. A consumer oriented and operated plan is a private, member-run, nonprofit organization that sells health insurance coverage and will be subject to the same rules as other health insurers. To date, a total of 23 nonprofits offering coverage in 23 states have been awarded $1,820,573,884. Illinois is the 24^th state to receive federal approval and funding.

Consumer oriented and operated plans differ from health insurance companies because they are member-run and required to use their revenues in excess of expenses to lower premiums, improve health benefits, improve the quality of health care, expand enrollment or otherwise contribute to the stability of coverage for members.

Starting Jan. 1, 2014, consumer oriented and operated plans will be able to offer benefit plans designed for individuals and employers to be purchased inside and outside of health care exchanges. Enrollment in exchanges will begin Oct. 1, 2013. Coverage through exchanges will begin in every state Jan. 1, 2014.

There are currently three kinds of exchange models:

• State-partnership exchange, in which states operate activities for plan management and consumer assistance, but can use federal government services for reinsurance programs as well as Medicaid and Children's Health Insurance Program eligibility assessment. This is the model selected by Illinois
• State-based exchange, in which states operate all exchange activities, but can use federal government services for:
  • Premium tax credit/cost sharing reduction determination
  • Exemptions
  • Risk adjustment program
  • Reinsurance program
• Federally-facilitated exchange, operated by the U.S. Department of Health and Human Services

For more information about Land of Lincoln Health, please visit www.landoflincolnhealth.org.

About Metropolitan Chicago Healthcare Council
The Metropolitan Chicago Healthcare Council is a membership and service association comprising more than 150 hospitals and health care organizations working together, since 1935, to improve the delivery of health care services in the greater metropolitan Chicago area. More information is available on the MCHC website at www.mchc.org.

Land of Lincoln Health, Inc. is committed to enhancing access to care in Illinois through quality, affordable health insurance.  Land of Lincoln Health was formed as a non-profit entity in the State of Illinois. Land of Lincoln Health intends to become a full licensed mutual insurance carrier in the State of Illinois and Operate as a Consumer Oriented and Operated Plan as identified in Section 1322 of the Patient Protection and Affordable Care Act.

SOURCE Metropolitan Chicago Healthcare Council