Updated: Health Alliance loses bid for state retiree contract

Updated: Health Alliance loses bid for state retiree contract

URBANA — The state has selected four new contractors for state retiree health coverage, effective Jan. 1, 2014, and Health Alliance Medical Plans isn't among them.

That will require 6,000 retirees who get their care through the Carle health system to change where they go for medical care by the end of the year, Health Alliance spokeswoman Jane Hayes said Wednesday morning.

The state awarded new contracts Tuesday for Medicare Advantage Plans for retirees to Aetna Life Insurance Co., Humana Health, Humana Benefit Plan and United Healthcare.

Here is the state's procurement website for the contracts.

Hayes said Health Alliance was already receiving calls about the new contracts this morning, and is urging retirees to call their associations or the Illinois Department of Central Management Services.

"This is an especially vulnerable population," she said of retirees. "They use more medical resources."

Health Alliance currently covers 15,000 state retirees and submitted a bid to cover retirees statewide, Hayes said.

"We think we submitted a competitive bid," she said.

None of the selected insurers has Carle in its provider networks, which is why current retirees in the state system would have to change where they go for health care, Hayes said.

And regardless of what other providers are available for retirees in their areas through other insurers that were selected, she said, she doubts any physician groups could absorb that many Carle patients — especially with more patients gaining coverage health coverage next year under the Affordable Care Act.

Hayes said she doesn't know what, if any, recourse Health Alliance has on the contract decisions.

"Protesting to an organization that doesn't seem to care about leaving 6,000 retirees high and dry might be a futile effort," she said.

State Rep. Chapin Rose, R-Mahomet, said he is "very concerned" about the contract decisions and still trying to get all the details Wednesday.

Retirees were detached from employees for health coverage contracts as part of an agreement between American Federation of State, County and Municipal Employees and Gov. Pat Quinn's office, he said.

"The thing that I asked all along was what is the coverage area. Will people be able to see a local physician, and the administration assured us all along that, yes, you'll be able to see a local physician," Rose said.

"By the way, does this seem reminiscent of two years ago," Rose also said.

Health Alliance wasn't selected for state employee and retiree health coverage in 2011 contract selections, setting off a public uproar, legislative action and a court challenge, and was eventually restored as an insurer for employees and retirees.

The new contracts stand to affect many, but not all, of the state's retired teachers, according to Illinois Retired Teacher's Association Executive Director Jim Bachman.

Those in the Teachers Retirement Insurance Program who are Medicare-eligible, about 45,000 people, would be affected, and those who aren't would remain in their current plans, he said.

Bachman said the majority of the association's members are concerned about the change since details remain unknown, but the biggest fear many had was that they'd lose their traditional Medicare plan.

The IRTA isn't taking a position on the contracts, since the state has the right to make a plan change, he said.

"We're just waiting to see the details of the plan before we can make any judgment," he said.

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BlahBlahBlah2013 wrote on October 02, 2013 at 11:10 am

Here we go again. Get the buses ready. The protest signs. Time for a pity party and you're ALL invited. I find it quite upsetting that the press, including the News-Gazette (BREAKING NEWS!!) and especially that Health Alliance owned radio station across town, WDWS and Penny for Your Thoughts, are so completely one-sided. The general consensus is, if Health Alliance doesn't always win there MUST be something wrong. I'm going out on a limb here but I'm going to guess that's not always the case. In business there are winners....and losers.

Let's not forget that Health Alliance is a local insurer. Not regional. Not national. Local. And when it comes to large State contracts, could it be possible that an Aetna, or Humana, or United could have a better deal? Of course. But you wouldn't know it by listening to the press or the "bought and paid for" local politicians.

My hope is that Health Alliance doesn't hold members and the State hostage again while they play victim in the press and courts. I, for one, have lost all patience for such PR tactics.








Bulldogmojo wrote on October 02, 2013 at 11:10 am

Well the state has a history of not following proper bidding procedures for CMS and the last time they were talking about Blue Cross blue shield which would mean driving out of town for all healthcare because they didn't list providers for that plan in this area with the biggest concentration of state employees and retirees in the state. 

Deb Pressey wrote on October 02, 2013 at 12:10 pm

First call I made this morning was to Illinois Central Management Services, and I am still waiting to get my questions answered on the contracts.  But considering the number of people who stand to be affected by these contract changes, we do consider this news that shouldn't remain buried indefinitely. Health Alliance is quoted in this story because the company was available to answer questions, and, of course, has a stake in the contract decisions, as do its retiree members who might not want to change doctors. I do hope to add much more information to this story as I get answers to my questions from CMS.

BlahBlahBlah2013 wrote on October 03, 2013 at 9:10 am

Deb. I would contact Carle and ask them some hard questions about why these members can't access Carle if they switch to Aetna or Humana or UnitedHealth. Don't they want to serve their local residents that they claim to care so much about? Or do they only care if the members happen to be Health Alliance members? They will have prepared remarks, or course. But ask them to respond. Most people are missing the entire point here.

cretis16 wrote on October 02, 2013 at 11:10 am

Exactly as the poster said previous. Carle thinks they own east central Illinois healthcare. The bid is a competitive process. My employer had Carle for many years, when they raised our group plan by 32% for next  years coverage...we negotiated, they refused to lower their bid. We then contracted with BlueCross, who provided even better benefits and lower deductables. When our HR office contacted Carle, they immediately offered a drop of 5% if we stayed with Carle. We did not, and how have BlueCross, with lower premiums and more services with Carle access too? Carle is not the end all of health care.

Sandy wrote on October 03, 2013 at 12:10 am

That is nice for you, but is totally irrelevant to the population affected by this decision, as none of the available choices cover Carle.  

The State may want to save money, but Central Illinois is not Chicago, and there are not infinite choices.  Dropping access to Carle effectively punishes retirees, who typically need more medical care than the average plan participant. Existing medical providers cannot absorb this population and provide the same level of care they now receive.

It will be good practice for Pension Reform.

cretis16 wrote on October 03, 2013 at 7:10 am

The problem is with CARLE as other posters have mentioned. I have BC/BS and I still go to my same Carle doctor. If Carle chooses to accept Humana or Aetna or other winning bidders that is a CARLE decision. The fault is not the insurance company, it's Carle who insists on a closed network and only want Health Alliance payers funneled to Carle. Remember this is a competitive bid process and Carle seems to be the spoiled child here.

BlahBlahBlah2013 wrote on October 03, 2013 at 9:10 am

cretis16 wrote: "The problem is with CARLE". Yes it is. People need to understand how the incesteous relationship between Health Alliance and Carle works and most people don't understand it. It is quite simply anti-competetive. It is Carle's choice to favor Health Alliance. It is Carle's choice to not negotiate good contracts with other major insurers. Health Alliance is no better or no more capable than any other insurance company. Their advantage is simply that they are owned by the preferred provider in east central IL. The other companies don't do themselves any favors of course. HAMP employs some convenient names on their Urbana payroll. A Madigan, a Frerich and quite a few former State of IL or CMS employees. Coincidence? I don't think so. They have also become masters at the PR game. But until the masses start standing up and calling, "BS", it will likely continue. My advice to the executive team of Carle Hospital and Carle Physician Group: Sell Health Alliance and get out of the insurance business and tear down those walls!  

Bulldogmojo wrote on October 02, 2013 at 12:10 pm

"Meanwhile, lawmakers ridiculed the HFS decision, saying that Blue Cross cannot meet the terms of the contract because it had no network of physicians in place"


mstook423 wrote on October 02, 2013 at 12:10 pm

Maybe this will cause the Carle Physician group to negotiate with one of the winners of the state contract.  It works both ways.  If Carle wants the state business they can always negotiate to be part of the network.

BlahBlahBlah2013 wrote on October 02, 2013 at 1:10 pm

mstook423 makes a very valid point here and one that a lot of people miss. Health Alliance is owned by Carle. Always has been. As a result, Carle has always given preferential treatment to Health Alliance, for obvious reasons. 

Put all the pieces together. Carle makes it hard for others to compete in this area by essentially locking out the competetion. Not exactly a fair model for consumers. Then when something like this happens Health Alliance cries about their members not being able to go to Carle. What? Who's fault is that? Carle's.

Maybe instead of wasting time calling CMS and the politicians that Health Alliance encourages their members to do, they should encourage their members to call Carle and demand they let other insurers play in their sandbox. 

As shrewd as Carle is, they should realize the future isn't in protecting a small, local health plan that only wins by manipulating its members and using them as pawns to get what they want. The future is in embracing and opening the doors to all insurers. Let the consumer decide. Or maybe that's what they are afraid of...





enoughalready wrote on October 02, 2013 at 4:10 pm

Talk to any local insurance broker....Carle has contracts with all sorts of insurance companies.  You don't have to be a Health Alliance member to have Carle as your provider.  Last time I checked, many of the Health Alliance plans were actually cheaper than the other carriers.

BlahBlahBlah2013 wrote on October 02, 2013 at 9:10 pm

You are exactly right, enoughalready, on both points. A couple comments: Carle does have contracts with multiple insurance companies. However, they own Health Alliance and rely on them to steer business through their doors. As a result, I would imagine the contracts Carle has with Health Alliance will almost always be better than with the other insurers. This gives Health Alliance an advantage. I suppose that's legal, just like not paying property taxes is technically legal for a hospital and calling "bad debt expense" charity. 

This is why the focus should be on Carle. There's no reason members can't still go to Carle, even if they are with Aetna, Humana, or UnitedHealth. The sticking point is Carle makes it costly to do so. I'll be curious to see how Carle handles this. My prediciton is Health Alliance will appeal the decision. They will kick start the great PR machine and play the victim who "deserves" these members, and while that's going on, Carle will stay in the background. Then what will happen depends on if Health Alliance is allowed back in. Kind of like giving the crying baby its bottle just to shut them up. If Health Alliance stays out though I would think it in the best interest of Carle to start negotiating with other carriers. It'll be interesting to see from a business standpoint. 

In the meantime we can all listen to Jim Turpin spread the gospel on WHAMP...stay tuned. 



rufoustfirefly wrote on October 02, 2013 at 1:10 pm

I worked for the U of I from one year after graduating college to my retireement 32.75 years later.  I am not eligible for Medicare by a few quarters because I was not allowed to pay into it until failry late in my career.  No, I am not married so I cannot expect any coverage through a spouse.

I retired early because I wanted to secure the benefits I'd been promised and because I'd already had one bout of lymphoma.

That lymphoma has returned and I am in the midst of getting a treatment plan established. 

Now CMS announces it is dropping my insurer, Health Alliance, from its offered plans and I will not be able to continue to receive treatment at Carle.

I now pay twice as much as Medicare eligible retirees for my health insurance because I am not Medicare eligible and those rates will double next year.  Now CMS expects me to switch providers mid-cancer treatment.  

What did I do wrong except believe in state contract provisions?  

Why can't Health Alliance and CMS ever work together? 

Why does CMS believe it can ignore as many as 6000 retirees?

What other local provider is ready to absorb 6000 new patients?

Come on, you pundits, explain it to me.

sweet caroline wrote on October 02, 2013 at 3:10 pm

Wouldn't rufoustfirefly qualify for Obamacare, though?  Isn't that what Obamacare is supposed to do?  I thought it was supposed to kick in for patients with pre-existing conditions who have no coverage. 

enoughalready wrote on October 02, 2013 at 1:10 pm

Maybe the other bidders should have made sure they had providers in this neck of the woods before submitting contracts to the State.  Health Alliance has contracts with providers in this part of the state but apparently the State does not care about retirees here.  Maybe the other bidders had better pricing because they had no providers and therefore won't have any expenses.   And another thing - one would think that the State would choose an insurer that is from Illinois before giving tax payer dollars to companies outside of Illinois.  I recently saw in the News Gazette that Health Alliance was the #1 health plan in Illinois for Medicare - clearly they know what they are doing and doing it well.  This decision makes no sense.

Lostinspace wrote on October 02, 2013 at 2:10 pm

How does this tie in with ACA?  Carle will have to accept any insurance plan, no?

justobserving1 wrote on October 02, 2013 at 4:10 pm

Not suprised by the decision. Though its not fair for those that are affected to lose their healthcare and have to drive elsewhere. Its a known fact that BC/BS doesnt have providers here in East Central Illinois.

For the person that stated Health Alliance is just a local company hasnt been paying attention, they have markets in at least 4 other states and have moved past just this area some time ago. It was only to be expected. All the other carriers here have other states to market in.

BlahBlahBlah2013 wrote on October 02, 2013 at 8:10 pm

While Health Alliance has made attempts in the past and may have some small membership in another state or two, their membership is overwhemingly, "local", or in central Illinois or southern Illinois. They are currently attempting to expand into 2 additional states. However, given their track record for expansion attempts in the past, time will tell if they have any success. 

airrecon wrote on October 02, 2013 at 10:10 pm

I don’t believe that CMS was ever taken to task for the shenanigans that they pulled on the previous fiasco with health care bids.  If it was, it was certainly not done publicly. Unless I missed it, there was never anyone held accountable for that exercise in sleight of hand and so we got no opportunity to “pay no attention to the man behind the curtain”. Could be the same guy is still back there pushing buttons and turning cranks. I would like to believe that CMS saw the light and ran this bidding process in a correct and honorable fashion because it was the right thing to do.  Failing that, I would like to believe that CMS saw the light and ran this bidding process in a correct and honorable fashion because they had been caught with their hands in the cookie jar and knew that people would be watching them very closely and so  it was the safe thing to do. However, I am wary of how CMS ran this bidding process because in this state, and frankly throughout the nation, it seems that arrogance and the ability of powerful people to manipulate situations to the conclusion that they favor has replaced honor, accountability, decency and the value of a person’s word.  Because of that, am very uncertain about how CMS ran this bidding process and would guess that others are wondering if arrogance was once again a major player.

BlahBlahBlah2013 wrote on October 03, 2013 at 9:10 am

I encourage every member affected by this decision to call Carle and not CMS or their representatives. Demand that Carle make it possible for them to see Carle providers, regardless of who their insurance company is. The local insurance and provider market is very similar to the local cable industry 20 years ago. Before, we were at the mercy of one cable provider. Now as consumers we have choices. Don't like Comcast? Go to DISH or DirectTV. The same competetive environment should be availabe to members and groups in east central IL. Tell Carle to stop limiting choice.

Trailmom wrote on October 07, 2013 at 3:10 pm

Did it occur to anyone that some insurance carriers don't want to contract with Carle? Because in their eyes some 15,000 retirees 'in the middle of cornfields' aren't enough business?   

And Carle has never made a secret about owning Health Alliance.  In fact, it used to be called 'CarleCare'. 

Someone at CMS has had it in for Carle/Health Alliance for a long time.  And guess where that person is from?   (Hint: they are not south of I-80).



ERE wrote on October 08, 2013 at 7:10 am
Profile Picture

A lot of relatively inaccurate comments about Health Alliance here. 

Why did Carle start Health Alliance/CarleCare? To protect a viable, LOCAL, NONPROFIT healthcare system in the onslaught of severe national healthcare FOR PROFIT businesses, such as Hospital Corporation of America (HCA) and HMOs intent on gouging American healthcare.

Yes, the same HCA business of conservative Senator Frist. Yes, the same HCA CONVICTED of SYSTEMATIC FRAUD of Medicare to the tune of TWO BILLION DOLLARS. 


Is Carle perfect? No, of course not. Like any healthcare system, it needs to be constantly focused on continuous quality improvement.

Does CU benefit from having a large well-managed medical GROUP practice in the Mayo style? YES. A group devoted to accountable cooperative care of complex medical patients with effective communication among multiple medical providers in a setting that promotes team over individual goals among providers? YES. 

BlahBlahBlah2013 wrote on October 09, 2013 at 9:10 am

ERE...Carle might have started, "CarleCare", for a very specific reason, as you mentioned. But that was a long, long time ago and the reasons for keeping Health Alliance are much different now. It's about limiting competition, which is never a good idea. Most importantly for consumers. The Carle of 2013 is a lot different from the Carle of 30 years ago. They have much room for improvement, most notably on being a good corporate citizen.

I want to like them. I want to support them but their arrogance and ego make that very challenging at times. Double billing their patients because of a huge loophole that can be exploited....not paying their fair share of property taxes and forcing residents of the city they occupy to pay the price instead....limiting competition by giving preferential treatment to a company owned health plan. These are all things that are viewed in a negative light by most, and for good reason.

Yes Chicago runs the state. Always has, always will. Chicago is both the best and worse thing about Illinois. But Carle has a habit of blaming others for its problems.  All businesses face challenges. And just because you can do something, (not pay taxes, double bill patients), doesn't mean you should.



Lostinspace wrote on October 08, 2013 at 5:10 pm

The point is: average people are jerked around while the big boys play their games.