State cuts temporary deals with 3 health insurance providers


SPRINGFIELD -- The state is making temporary deals with three state employee health insurance providers until officials can determine which carriers should receive longer-term HMO contracts.

The Commission on Government Forecasting and Accountability has approved 90-day contracts with Health Alliance HMO, Health Alliance Illinois and Coventry Health Care HMO (formerly PersonalCare HMO).

They are among eight health insurance options available to state employees, retirees and dependents during the open enrollment period, which will end June 15.

“In order to make sure we have a full range of health carriers in place for the start of the fiscal year (July 1), we have decided to enter into emergency contracts,” said Mike Claffey, spokesman for the Department of Healthcare and Family Services.

All three companies submitted proposals to DHFS to provide HMO coverage to state government next year.  However, the deadline for submitting the proposals was only Monday, and the department hasn’t had a chance to evaluate them and determine which proposals should be selected.

“To allow plenty of time to score those proposals without rushing, we decided it made sense to enter into 90-day contracts,” Claffey said.

Those covered by state health insurance are receiving letters from the Department of Central Management Services announcing that the benefit choice period will end June 15.  The contracts, including the three 90-day contracts, start July 1.

The letter also says a special enrollment period might be scheduled later if event the state rejects one or more of the HMO bids.  That will give members who enrolled in one of those plans a chance to select different providers.

All of this is an outgrowth of last year’s attempt by DHFS to rebid state worker health insurance contracts.  The state didn’t renew contracts with Health Alliance and Humana, two companies that had long provided health coverage to state workers, particularly downstate.

Instead, DHFS awarded HMO contracts to Blue Cross and Blue Shield, even though that company didn’t contract with health care providers in some downstate counties.  The state also awarded contracts for open access plans offered by Health Link and Personal Care.  DHFS said the state would save $1 billion over 10 years with the new contracts.

Health Alliance challenged the state’s bidding process in court.  To settle the lawsuit, the state agreed to rebid the HMO coverage contracts and keep the Health Alliance contract in place until June 30.

This spring, Auditor General William Holland issued an audit that said potential conflicts of interest and other flaws created “serious deficiencies” in the selection process. The audit said it was difficult to verify the state’s claim of $1 billion in savings.

The problems were so extensive that Holland said his staff was “unable to conclude whether the state’s best interests were achieved.”

Although the new round of bids hasn’t been rated yet, COGFA co-chairman Sen. Jeff Schoenberg, D-Evanston, said he thinks a repeat of last year will be avoided.

“I’m confident everyone involved has learned from what happened previously and will take extra care to make sure the transition is smooth and not disruptive of anyone’s lives,” Schoenberg said.

Whether the state gets a better deal on its insurance costs will be determined after the bids are evaluated, Schoenberg said.

The letter from CMS also alerts retirees to Senate Bill 1313, which would authorize the state to charge premiums for retiree health insurance.  The bill has passed the House and Senate, but has not yet been sent to Gov. Pat Quinn for his signature.

CMS is to establish premiums under the bill.  No changes have been made yet, however, the letter says. The information will be posted to the state’s benefits website  when it becomes available.

The state and the American Federation of State, County and Municipal Employees union are also negotiating a new labor agreement.  Health insurance premiums and co-payments for active employees are included in those negotiations.

Doug Finke can be reached at (217) 788-1527.

Health insurance choices

Here are the health insurance options available to participants in the state’s group health insurance program.

Quality Care Health Plan (Cigna)

Health Alliance HMO

Health Alliance Illinois

HealthLink OAP

HMO Illinois

BlueAdvantage HMO

Coventry Health Care HMO

Coventry Health Care OAP