Health care switch for state workers may be in trouble
SPRINGFIELD -- A controversial plan to switch as many as 100,000 state employees and retirees to other health care plans could be in trouble with state legislators.
At the least the plan to switch them from Urbana-based Health Alliance to a number of alternative plans could be delayed.
Sen. Mike Frerichs, D-Champaign, who is one of 12 members of the Commission on Government Forecasting and Accountability that will vote on the state's health care contracts to begin July 1, said he believes the Quinn administration's preliminary contract awards could be in trouble with lawmakers who repeatedly expressed questions Monday about suggested cost savings and limited access to health care providers.
"That is a definite possibility. At this point, barring more answers, that's what I'd recommend," Frerichs said. "I still have a lot of questions left unanswered. HFS (the Department of Healthcare and Family Services) was unable to answer them today because we're still in the protest period. But I think there are questions they won't be able to answer. These projected savings don't make sense to me, based on what probably would be a big rush of people out of HMOs into these open access plans that even HFS has said are more expensive.
"And then there are questions about the potential lack of continuity of care for thousands of people across central Illinois, and the potential of higher costs for them and possibly for the state."
It's unclear when the Commission on Government Forecasting and Accountability will vote on the health care contracts. Because Health Alliance has filed a formal protest over apparently losing the state contract, the decision is being reviewed by the state's executive ethics commission and Healthcare and Family Services officials.
State Rep. Chapin Rose, R-Mahomet, who is not a member of the commission, remained skeptical of estimates of $102 million in savings with the switch to two Blue Cross Blue Shield plans.
"From a policy standpoint, when you move from Health Alliance, where does this huge group of people go? Do they migrate to the more expensive plan?" Rose said. "The last time we did this we found that everyone would go to Quality Care to keep their Carle docs, and it would be far more expensive to the taxpayers. Not only would it not be a savings, it would be far more expensive."
Rose said the Quinn administration planned to hold a briefing with legislators on Tuesday to explain the controversial decision.
"If there's insufficient medical capacity to accept all the people to migrate, this is going to be an unbelievable boondoggle for everybody," he said.
State Rep. Raymond Poe, R-Springfield, said his office has received more than 500 phone calls and email messages about the switch. Frerichs estimated his office got close to that many communications as well.
The director of employee benefits for AFSCME, which represents thousands of state employees and university workers, thanked lawmakers for slowing down the contract award.
"One of the things that was adopted by the General Assembly and ultimately signed," said Hank Scheff of AFSCME, "was an amendment to the group insurance act which essentially says that one of the criteria for the director in making these awards and selections is that members should have continued access on substantially similar terms and conditions to trusted health care providers with whom they have developed a long-term relationship.
"We're not talking about bidding a fleet of automobiles here. We're talking about members' health care, and it's important that the commission take a really close look at a balance between cost saving and ensuring quality medical access."
Scheff, too, expressed skepticism about the projected savings.
"We cannot verify reported savings. But to us it's important to take a look at whether the savings are real. I think significant questions have been raised," Scheff said. "I think access is also a potential problem too. How disruptive will this be? What are the current networks in place?"
Health Alliance CEO Jeff Ingrum said comparing the costs for Blue Cross' Chicago program with Health Alliance's downstate program is flawed.
"There's been no dispute that there are differences in Chicago versus those in downstate Illinois," he said. "No downstate HMO can provide a rate as low as those in Chicago-based HMOs."
MoreAbsolutely a ridiculous idea which totally screws the employees of the largest employer in E central IL (UIUC) and potentially disrupts a great deal of business done by another huge employer (Carle). What sort of "cost saving" is it to force people to pay more to switch plans?
Employees pay a higher percentage of health care cost while all tax payers/the state pays less of a percentage. The shift is away from relying on government and covering more expenses yourself. The value of the dollar is shrinking as the world goes global with business. Those providing services are elevating their expense to match or escalate and cover the difference lost in the shrinking dollar while they spend their dollars going global. Its about getting the most, the high ground of economics. When that has been completed then you will see the New World Order come into reality or three world powers.
This is what we call competition in America folks. Hopefully it's all above water and no back room deals have been made. I wouldn't be too critical of Blue Cross or the State. Where has Health Alliance upper management been on this? Wouldn't you have a contingency plan in place knowing a few years in advance this bidding process is coming up and you could lose a third or half of your revenue? The State wins either way on this. They either take the Blue Cross deal or the bidding opens back up and everyone submits lower bids. Buying on price isn't always the best way to go!
"Where has Health Alliance upper management been on this? Wouldn't you have a contingency plan in place knowing a few years in advance this bidding process is coming up and you could lose a third or half of your revenue?*
Their employees would like to know the answer to this as well.
@Kiel: "What sort of "cost saving" is it to force people to pay more to switch plans?"
By having individuals pay more as a deductible or premium, the state saves money. Assume that 100,000 employees have to pay $1000 more per year in a mix of premiums or deductibles: that results in a $1Billion dollar savings annually for the government, but at the expense of the employees.
Add this to the 66% tax increase, and the state is going to put a lot of people into bankruptcy. At the same time, he'll kill many jobs at Health Alliance and put a serious dent in Carle Hospital's business.
Actually, this situation has nothing to do with the recent popularity of the Tea Party-esque idea of shifting public employees benefit costs to the employee. This is simply a case where HA could not be competitive so they lost the contract. If you read above, Rep. Rose clearly states what is most confusing about this situation; if employees lose access to HA most will switch to QC to keep their medical professionals at Carle, which costs the STATE more to administer than an HMO such as HA. No shift of cost to the employee.
For anyone that works at HA to say they are more concerned with state employees and their coverage is not being completey truthful. Everyone at HA should be concerned. Most are a pen signature away from the unemployment line.
The problem is multi layered. BC/BS do not have PCP's here in the area. The closest is Springfield. Of course people are not going to want to change doctors. Personal Care stinks, never paid on time and there was always some excuse on why they didnt process a claim. You cant just drop 100,000 patients into a different market and expect it to go well. There are people with chronic ailments who cant wait 6 months to see a doctor.
What will happen if the state drops HA will be painful, it will affect everyone from State employees to Health Alliance itself. We are talking massive layoffs and rebuilding during a time when money isnt exactly flowing. So Pat Quinn is going to up the unemployment in an effort to make 100 million year? Does this math remotely make sense? Pat Quinn is full of it. Everyone in this equation has an agenda; at the end this is just one big mess that honestly HA should have seen coming.
There is no exaggerating, HA will have to cut 50 percent of its staff and thats being generous. Carle Foundation is going to take a big hit too. And for those not in the know, BC/BS is not contracted with Carle physicians like most, the hospital yes, the clinic no and yes there is a huge difference.
I fault HA's business structure. The company is worth 1.1 billion and will lose 450 million. This is a prime example of what happens when one lets one person make up their entire portfolio. They ditch you and there goes half of your earnings. Not smart business. Things are in panic mode at HA right now and it should be. How in the world will the CEO explain to the staff that half of them lost their jobs due to the company's inability to compete? If he loses this deal, you cant help but wonder will he be voted out, its a very real possibility. Not that he will hurt. Like most CEO's he will be paid for failure while the employees struggle to care for their families.
I guess after all the years of having a contract maybe the marketing department thought it was guaranteed, they were wrong.
I'm missing something here: If the contract is awarded to BCBSIL how do the employees have the option to go with Quality Care to keep their Carle doctors thus increasing costs anyway?!
If i don't like my employers insurance choice I'm out of luck. Actually I'm not fond of my plan, but I deal because it's still more afordable than any individual plans offered by companies like HA & BCBS.
I hope the HA contract does end and people scramble. I'd actually love nothing more than for HA/Carle to suffer like other businesses have in this economy instead of having a monopoly of sorts in the area. Sorry but plenty of small employers have been gouged by HA for years but don't have real viable options to go elsewhere due to geographic isolatoin and HA/Carle control of the market. BCBS does cover some doctors in the area. I had BCBS through an area employer and I did okay. I guess once Carle's staff is looking for work elsewhere BCBS customers will have more options?
Oh and way to open up Facebook and the media to your employees to complain after you lost Carle. Stay classy. You screwed up with the pricing you provided. Enjoy!!
You have some very valid points. The only thing is that I dont really think its fair to take joy in the people who will lose their job. Its not their fault.
Carle physicians can simply stop taking new BC/BS patients and yes they can do it and get away with it. Of course they wont just come out and say it. But it will become apparent.
One big mess.
It's not taking joy in the actual employees losing their jobs. It will directly affect friends of mine. My issue is with Carle & HA and their business practices. It's unfortunate that there isn't a way to put the screws to a company and not their employees.
It's also unfortunate that "patients" don't have to take responsibility for keeping healthcare costs down. I drives me insane to know how often some people run to the doctor or ER every time they think they might be sick because their co-pay is only $20 (or even less for some). Yes, you might only pay that but there is quite a bit more money changing hands within the Carle/HA organization that just inflates those "costs" that they site for insuring a group of people.
When does healthcare reform start...
They are being put on plans that will not service them. I have been on BC/BS and been told to take my very sick child to Danville or Peoria instead of Carle where her doctors were if I wanted my claims to be paid. The state is offering the employee a health care plan that does not service them. It services the people in Chicago. It also affects a lot of jobs, not just Health Alliance. Jobs held by your average Joe middle class.
Most employers work to make sure an employee at least has adequate coverage, even when switching insurances. It is clear the state of Illinois did not.
Don't forget, the root cause of this mess is inflated medical costs. We are so enslaved by our every ache and pain and so trained to genuflect before the mighty doctors that we don't think twice when we're billed $150 to clear up a stuffy nose. We just want to know how much of it the insurance company is going to make us pay. If it's low enough we don't care how much hospitals bill for their services. Nevermind that the hospitals and doctors are getting away with egregious acts of waste and arrogance, and that health insurers just hike their premiums to ensure they make a profit off all of us before we're stuck in the ground. If the co-pay ain't bad, we don't complain.
Medical costs don't affect what we pay in health insurance? That's so absurd that I wonder if you're responding to another comment. If you are, I apologize. But as for being well-informed, I'm not making this stuff up. I have doctors in my family who complain about the waste in the medical profession. We are petrified at being touched by something that's touched another human being, so instead of sterilization, we have all varieties of medical equipment that's thrown away after a single use. We're doing full exams of 95 year-olds in the last months of their lives and telling them they need to stop eating bacon. The list goes on. There are too many people who feel they deserve to get rich off the healthcare system. Of course it affects insurance rates.
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