COGFA can't block health insurance switch, Madigan says
SPRINGFIELD -- A legislative oversight panel does not have the authority to block individual health insurance contracts for state employees, Attorney General Lisa Madigan's office determined.
The decision appears to make it more difficult for lawmakers who want to reverse state government’s controversial decision to drop two popular health maintenance organizations offered to state employees and replace them with new health plans.
The General Assembly’s bipartisan Commission on Government Forecasting and Accountability sought the opinion because it was unclear if the commission could simply vote to reject the new health contracts negotiated by the Department of Healthcare and Family Services.
Madigan said COGFA can review the health plans, but state law “does not authorize the commission to approve or disapprove individual health benefit provider or administrator contracts.”
DHFS sparked an outbreak of controversy last month when it announced that it was dropping HMOs offered by Health Alliance and Humana, which together insure more than 100,000 state employees and dependents.
The state will instead offer an HMO from Blue Cross Blue Shield and an open access plan – a sort of hybrid HMO – from Personal Care. The Blue Cross HMO will be offered only in 38 counties, and critics contend it does not have the physician network to absorb all of the people now in Health Alliance and Humana.
DHFS said the switch will save the state $102 million next year and $1 billion over the 10 years by making the switch.
But state employees say the change will force them either to switch doctors or move to a more expensive insurance option if they want to keep their current doctors and other health care providers.
State lawmakers with large numbers of state workers in their districts said they’ve gotten complaints by the thousands and said they dispute the savings figures touted by DHFS.
“The administration’s numbers are a bunch of bunk,” said Rep. Chapin Rose, R-Mahomet. “There’s no way their numbers are accurate.”
Rose was one of a dozen lawmakers at a Statehouse news conference held Thursday to again question the administration’s claim the switch will save money. The group wants the bids scrapped that led to the decision to switch and start the process over.
“I’m not convinced they will be able to show the savings that are implied,” said Sen. Michael Frerichs, D-Champaign. “We hope to have a new bid process.”
Health Alliance hired a consultant to analyze the state’s projected savings. It determined the savings from employees in Sangamon County were based on doctors offering their services at far lower fees than now.
Health Alliance CEO Jeff Ingrum also contended the state’s consultant didn’t have access to all of the rate information needed to conclude the state would save money.
“We know the (state’s) study is false,” Ingrum said. “It’s clear that these numbers won’t add up, because they have not taken into consideration all of the facts.”
DHFS said it stands by its savings estimates.
“We are absolutely confident not only in the integrity of the procurement process, but in the decision that was made based on the evaluation of the bids and in any resulting cost savings,” said spokeswoman Stacey Solano.
Solano said DHFS will be able to document the savings in detail once the state resolves protests filed by Health Alliance and Humana over the bidding process. She said purchasing laws prevent the department from talking in detail about the numbers while the protests are pending.
Rep. Raymond Poe, R-Springfield, said COGFA may still be able to block the changes despite Madigan’s opinion. State law allows COGFA weigh in on self-insurance programs. One of the alternatives to the HMOs being dropped is a self-insurance plan.
Rose said all of the lawmakers at Thursday’s news conference want to stop the state from going ahead with the switch. He said they are still discussing the best course of action.
Doug Finke can be reached at (217) 788-1527.