Judge Puts Hold on State Health Insurance Switch

(Last Updated at Monday, June 13 at 9:43 AM)

A Sangamon County Judge has stalled the Illinois Department of Healthcare and Family Services' attempt to switch thousands of HMO plans in Central Illinois.

In response to a push by the state to drop Urbana-based Health Alliance and Humana as options for public and university employees, Judge Brian Otwell issued a temporary stay in any further action in awarding or signing the self-insurance, or Open Access Plan contracts.

State officials say the new contracts will save Illinois about $100 million over the next year. Governor Pat Quinn's administration has argued these so-called "open access plans" are cheaper, because the state's the ultimate insurer.

The ruling means that employees can continue enrolling in HMO plans, just not the popular downstate plans provided by Urbana-based Health Alliance and Humana.

The companies filed a lawsuit in protest.

"It will be up to HFS to decide on the actions to take based on the judge's ruling," Health Alliance CEO Jeff Ingrum said in a statement. "We are relieved the judge has stopped the process while the issues are examined by the court."

Judge Otwell's ruling comes just a week before the annual open enrollment period expires, a time when workers can pick new plans. The ruling throws that process into havoc as employees have few choices beyond an HMO option. Otwell calls the timing of his decision, "highly regrettable" but unavoidable.

Mike Claffey, spokesman for the Department of Healthcare and Family Services, said the state intends to appeal Friday's ruling. He claims nothing in the ruling, "calls into question the fairness of the procurement process."

"Today's decision has created uncertainty for state employees and other members of the state group insurance program who are currently in the process of making decisions on their health care plan for the new fiscal year that starts July 1," Claffey said. "We want group insurance plan members to know that we will act promptly and explore all the options to ensure that they have managed care coverage."

Meanwhile, another state agency, the Department of Central Management Services, released a statement on its website Sunday saying that for now, state employees can only choose from the two Blue Cross HMO plans --- covering only 38 counties, and the state's more expensive Quality Care plan. CMS said that could change if emergency healthcare contracts can be signed, or if Judge Otwell takes further action in the case.

For updates, workers are instructed to check the website benefitschoice.il.gov