Health Alliance, Humana Given 2nd Chance on State Employee Plans

(With additional reporting from Illinois Public Radio)

Action by a state legislative panel Tuesday will give two health insurance providers the chance to submit new proposals for healthcare packages for state employees.

The joint Commission on Forecasting and Accountability voted to allow the Quinn administration to accept new proposals on HMO plans for downstate employees. Plans from Urbana-based Health Alliance and Humana were both rejected last year --- now they and other providers will have another chance.

Commission member and State Senator Mike Frerichs (D-Champaign) said the new Request for proposals will fill a gap in the health plans selected by the Illinois Department of Healthcare and Family Services last year.

"What happened last year is, in the Chicagoland area, state employees had a HMO option," Frerichs said. "But for large parts of downstate, they didn't. So this will correct that discrepancy. "

The Quinn administration previously said dropping Health Alliance and Humana would save the state more than $100 million in the first year alone.

But the companies say it would have left state workers in much of downstate Illinois without access to an HMO, and would increase their health care costs or require them to change doctors under other types of plans.

As part of the arrangement, Health Alliance and Humana are dropping their lawsuits against the Illinois Department of Healthcare and Family Services. Health Alliance Spokesman Jane Hayes said a chance to submit new proposals is the best outcome for which they could have hoped.

But Healthcare and Family Services director Julie Hamos said whether Health Alliance is able to offer a new HMO plans to downstate employees depends on what kind of bids the state receives.

"There's no guarantee that anyone will get the award, of course," Hamos said. "And we are proceeding as though most of the state could have fully-insured managed care services."

Many state employees have held on to their old HMO plans under a temporary extension. State officials hope to offer a new HMO plan for downstate state employees, when the new Open Enrollment Period begins May 1.