One of the many provisions of the Patient Protection and Affordable Care Act was to provide federal loans to help start consumer operated and oriented health insurance plans (CO-OPs). The idea was that giving co-ops a leg up would create a more competitive landscape for health care providers, which in turn would spur those providers to deliver better pricing, service and products. Meanwhile, the co-ops themselves, like any other mutual insurance company, would be governed by their policyholders.
The funding for this effort was hung up in the fiscal cliff negotiations that dominated the media at the end of 2012, and Land of Lincoln Health was the last co-op (of only 24) to secure funding before the funding itself was shut down. Land of Lincoln was granted a $160 million loan from the federal government, and in less than a year, managed to build a start-up health insurance company that offers dozens of tailored health plans aimed at connecting people with the right doctors and hospitals. Land of Lincoln health plans became available for purchase on October 1, 2013, making it one of the country’s youngest insurance companies.
Jason Montrie is Land of Lincoln’s vice president of channel and network development, and has played a central role in getting the co-op up and running, as well as building ways for co-op members to shop for plans that are right for them, whether through the public marketplace, or through Get Covered Illinois (the Illinois exchange partnership with the federal government).
“We have a wonderful relationship with the Illinois marketplace and the department of insurance, and as a consumer-oriented plan, we’re all about education,” Montrie says. “How can we educate consumers to make the best decisions for them and their families? As a not-for-profit, that’s what is important to us. What subsidies are available to our policyholders? Is the public marketplace the marketplace for them? At the end of the day, we just want our consumers to be educated.
Land of Lincoln’s first enrollment was on Oct. 1, when open enrollment began, and the co-op has been enrolling individuals, families and small businesses ever since, with a January 1 effective date for all policies. This got the attention of plenty of customers, including lawyer Elliot Richardson, a partner in the 10-person law firm of Korey & Richardson, but he is also the CEO and co-founder of the Small Business Advocacy Council, a group that represents some 20,000 small businesses in the state of Illinois. Deeply concerned with rising costs of health insurance, the SBAC found the types of plans Land of Lincoln provided to be very competitive, not to mention that Land of Lincoln was one of only two health insurers offering plans to small businesses in the state. So when Land of Lincoln began enrolling, the SBAC was ready to bring them their business.
“We were very impressed by Land of Lincoln’s leadership team, with their focus on the total cost of health insurance, and their dedication to bring out a really great product in Illinois that would help to stabilize prices,” Richardson says.
He adds that the SBAC liked that Land of Lincoln was associated with the Metropolitan Chicago Hospital Council, and had actual medical professionals who were part of putting together Land of Lincoln’s co-op. “It is all a breath of fresh air,” Richardson says. “And it is very exciting for business owners who before, did not feel like they had a voice in their own health insurance options. We feel that we have a voice now.”
Connecting the SBAC with Land of Lincoln has been good for Illinois brokers, too. “I have been in rooms with Land of Lincoln and large brokers in Illinois as they work together to hammer out ways to stabilize insurance costs,” Richardson says. “The synergy has been something special to watch. Land of Lincoln is bringing brokers into the SBAC and brokers are literally standing in line, saying ‘we want to be able to sell this product.’”
See also: PPACA premiums, state-by-state
Land of Lincoln’s small business plans have many of the same attributes as their individual solutions. There are some different rules on out-of-pocket expenditures and what kinds of deductibles a small business can have relative to an individual, but mostly the offerings are similar. Montrie notes that Land of Lincoln spent a lot of time designing its plans to have low deductibles and co-pays, and constructing its network while trying to be mindful of consumers’ need for affordable coverage, access to providers, and to be able to understand it all.
Land of Lincoln’s biggest challenge was getting up and running with a short timeline and no preexisting infrastructure. But that, Montrie says, ultimately proved to be the company’s biggest asset, because it enabled Land of Lincoln to build a health insurance company exactly to its own specifications, and toward the delivery system it wanted from the beginning, rather than try to retrofit an existing organization. To that end, Land of Lincoln worked with academics from Northwestern University and Emory University to rethink typical health insurance interactions with policyholders and how that whole process can be simplified. Still, it was a huge challenge to get from funding to an operational, integrated insurance outfit in only eleven months, Montrie admits. It took an incredible amount of discipline, a sophisticated business plan, and leveraging partners inside and outside of the insurance industry.
If Montrie had a bullhorn through which to shout one piece of information he wants the world to hear, what would it be? “I would tell people to shop for their health plan like any other important decision they make,” Montrie says. “There is more than just a monthly premium to factor into the decision. It’s about the total cost. Things like the provider network. Not everybody knows the nuances inside of every plan, so people need to become informed consumers. Their monthly premiums, the total cost of their plan and the provider network that they need all should feed into their health care purchasing decision.”