Lawsuit hits struggling Illinois Obamacare plan
By Kristen Schorsch, Crain's
Chicago Business
February 3, 2016 - Modern Healthcare
Two University of
Chicago Medicine patients have filed a class-action lawsuit against Land of
Lincoln Health, saying they wouldn't have bought the Obamacare plan if they had
known their doctors would be dropped from the network.
Chicago-based Land
of Lincoln, which was created under the Affordable Care Act to stir competition
and drive down prices on the health insurance exchange, said last month that it
was cutting U of C Medicine from its network as of March 1.
The lawsuit
is the latest blow to the insurer. Its net losses swelled to $50 million heading
into the third year of the exchange in the fall. The insurer, which has nearly
70,000 members, has stopped taking on new customers to cut costs. Land of
Lincoln is a federally backed co-op. Of the 23 created, 12 have closed after
struggling financially.
Land of Lincoln Health does not comment on
pending litigation, spokesman Dennis O'Sullivan said.
The complaint,
filed in Cook County Circuit Court, alleges that Land of Lincoln sold Daniel
Blumenthal and Michael Hartzmark a health plan for 2016 that included in-network
coverage for U of C Medicine, though the insurer knew that the Hyde Park-based
specialty hospital would not remain in its network.
Land of Lincoln's
conduct "constitutes misconduct violating the state consumer fraud statute and
has resulted in the defendant's unjust enrichment," the complaint
alleges.
Dec. 17, 2015, was the deadline to enroll in a plan on the
Obamacare exchange for coverage starting Jan. 1. The lawsuit alleges that before
Dec. 18, U of C Medicine told Land of Lincoln Health it wasn't open to
renegotiating new reimbursement rates. The insurer allegedly did not disclose
that to consumers buying its plans.
U of C Medicine told its patients in
a letter in late December that it no longer would be in Land of Lincoln's
network as of March 1.
Consumers pay discounted prices and share the cost
of their medical bills with their insurer if they see doctors and hospitals in
their network. They shoulder a larger share of the cost if providers are out of
network.
Blumenthal and Hartzmark, patients of U of C who live near the
health system, would not have bought a Land of Lincoln plan had they known the
South Side hospital network wouldn't be in it, the complaint said. Now they and
other proposed members of the class-action lawsuit will pay more for their care
or must buy policies from other health insurers that could be more expensive,
the lawsuit alleges.
Blumenthal and Hartzmark already have paid
deductibles this year toward their Land of Lincoln policies and will have to pay
a new deductible if they choose a health plan from another insurer, the
complaint said.
Blumenthal has been treated at U of C Medicine for a
chronic disease for more than 10 years, the lawsuit said. He had only until Jan.
31 to buy a plan from another insurer with U of C Medicine in its network; he
did so, and the premiums are about $170 more per month than his Land of Lincoln
plan, the complaint said.
He already had spent up to $600 on medication,
paying the full cost because he hadn't yet hit his $1,000 deductible before Land
of Lincoln would have started sharing the cost of his drugs. After changing to a
new policy, Blumenthal will likely have to start over on a new deductible, the
complaint said.
Hartzmark bought insurance for himself and his wife, who
was stricken with a rare and life-threatening viral infection in 2015 and was
treated at U of C Medicine. They wanted to continue to receive care there, the
complaint said.
Hartzmark says he received an email from Land of Lincoln
on Jan. 27 that he had only until Jan. 31 to buy a plan from another carrier to
continue to have U of C Medicine in-network, the complaint said.
He
bought a new plan from another carrier. The premiums are about $825 more per
month than those on his Land of Lincoln plan, the complaint said. He also will
have to start from zero on his new deductible.