Pool of ObamaCare insurance providers continues shrinking in Illinois

The nation’s largest insurance company, UnitedHealth Group, won’t be participating in Illinois’ health insurance exchange, Crain’s Chicago Business reported on Monday. UnitedHealth Group is the second-largest insurance company in Illinois’ nongroup market, the market in which the exchange will operate. Although state officials recently predicted 16 insurance companies would participate in the exchange, Crain’s reports that just...

The nation’s largest insurance company, UnitedHealth Group, won’t be participating in Illinois’ health insurance exchange, Crain’s Chicago Business reported on Monday. UnitedHealth Group is the second-largest insurance company in Illinois’ nongroup market, the market in which the exchange will operate.

Although state officials recently predicted 16 insurance companies would participate in the exchange, Crain’s reports that just six will now sell policies in the exchange. Two of those six have since merged, narrowing the field to just five. Worse yet, the number of different policies offered on the exchange will be nearly 40 percent lower than expected last fall.

One of the five companies participating in the exchange is the Land of Lincoln Health Inc., a startup funded by a $160 million federal loan to cover about 20,000 individuals in 2014. Similar startups, also financed with federal loans, have popped up in 25 states since ObamaCare was enacted. In Vermont, the federally funded Vermont Health CO-OP was denied its state insurance license, with a state regulator noting that the company was expected to face insolvency in just three years. That’s no surprise: the federal government predicts that 35 to 40 percent of these federal loans will never be repaid. The loan program for these startups is also the focus of four separate federal investigations.

Illinois has yet to disclose premiums for plans offered on the exchange, which is supposed to start enrolling individuals in just two-and-a-half months. But according to the Society of Actuaries, individuals in the nongroup market can expect to see their average premiums increase by more than 50 percent.

The state also hasn’t released details of the policies offered, including whether the policies will have very limited provider networks as expected in many states. In several states, including California, insurance companies in ObamaCare exchanges are limiting patients’ choices of physicians, specialists and hospitals to help blunt some of the expected premium increases.

Despite the early expectations of state officials, the exchange won’t be the competitive marketplace originally envisioned. Instead of 16 competing companies, residents will choose from just four established companies and a new startup funded by the federal government. No wonder the state plans to spend up to $35 million in federal grants advertising for ObamaCare.