Illinois Panel Votes to Extend State Health Insurance Contracts

A legislative panel has voted 8-1 to authorize the state to negotiate health insurance contract extensions through the end of June 2012.

All vendors providing health insurance coverage for state workers, including Urbana-based Health Alliance, will be able to negotiate nine-month extensions following Tuesday's decision by the Commission on Government Forecasting and Accountability (COGFA). State Senator and COGFA member Mike Frerichs said the extension should provide relief for a lot of people.

"I think for now the legislature has done its part," Frerichs said. "It's now up to the health insurance providers, and the (Illinois Department of Healthcare and Family Services) to work out the terms of the deal."

Orland Park House Democrat Kevin McCarthy cast the only dissenting vote.

The state health contracts have been operating for the last few months under a 90-day extension that is due to expire at the end of September. A state appellate court recently upheld a Sangamon County judge's ruling, preventing the state from moving ahead with new health contracts for state employees and retirees. Illinois Gov. Pat Quinn's administration has argued the so-called 'open access' plans will save the state about $100 million a year.

"We are very happy to been given the opportunity to negotiate a longer-term contract to continue serving state workers and their families," Health Alliance CEO Jeff Ingrum said in a statement. "Every day we receive calls from our state members wanting to know if they'll be able to stay with Health Alliance."

But insurers may not get a rate increase from the state over what they're getting currently. In addressing the panel Tuesday, Ingrum compared his provider's rates with that of another provider.

"We are looking at the rate increase and just seeing in this environment to extend a rate from FY 11 to a full year," he said. "If that would be the ultimate terms, it would be a bit unreasonable given the fact that Blue Cross (Blue Shield) got an increase."

Print reports indicate Ingrum is seeking a rate hike of around 5-percent. A company spokeswoman, Jane Hayes, said she understands the state's needs to save money by dropping Health Alliance. However, she said she has a great deal of confidence that Health Alliance will be able to reach a deal with the state.

State Senator Shane Cultra (R-Onarga) praised the vote by COGFA.

"Finally, thousands of central Illinoisans can breathe a sigh of relief," Cultra said in a statement. "We must fix the current process now, so we are not sitting here next May without a permanent solution in place for the 100,000 state workers and retirees who have faced this uncertainty since this process began."

The state is scheduled to argue before a Sangamon County judge later this week to argue whether COGFA has the authority to extend the current health insurance contract. However, Sen. Frerichs said Gov. Quinn's office recently filed a motion to dismiss that case.