Ethics Commission Upholds Decision to Drop Health Alliance HMO, Humana

May 24, 2011

There's disappointing news for state and university employees and retirees who had been holding out hope Illinois would continue to offer Health Alliance and Humana health insurance.

A state ethics commission came out with a ruling Tuesday night that the Department of Healthcare and Family Services was right to drop the companies.

By law the department had to stay largely silent while awaiting a decision. Spokeswoman Stacy Solano said the department's looking forward to sharing details that she says should calm anxious employees and angry legislators.

"This was the procurement process it was done," Solano said. "You know it was done ethically, it was done fairly, the top bidders won for both contracts. And there really isn't anything you can deny about that."

Solano said the state will save a billion dollars over the next decade by dropping Health Alliance HMO, and moving many employees to another type of managed care plan, known as an Open Access Plan.

But a battle still awaits. Downstate legislators have been highly critical of the decision to drop Urbana-based Health Alliance. They have shown no signs of letting down. Many of the approximately 100,000 employees and retirees with Health Alliance as medical insurance say they don't want a new provider because they fear they'll be forced to switch doctors. They are also concerned they will pay more out of pocket on doctor's visits.

Had the ethics commission ruled there were problems with the bidding process, it may have given Health Alliance another opportunity to keep its contract. Instead, legislators now have little say over that.

A bipartisan legislative commission is set to meet about the ordeal Wednesday morning. Due to a new law meant to keep politics out of procurement decisions, legislators cannot block the state from entering into contracts with other insurers.

But lawmakers do have the power to send matters into a tailspin. They could forbid Illinois from acting as a self-insurer with Open Access Plans. Moving many employees to this sort of plan is how the Quinn administration had been planning to save up to $100 million a year.

As it stands now, however, state employees have until June 17 to decide what provider they want for medical coverage.

Story source: AP