Let's go back to square one and rebid the health insurance contracts for state employees.

If the Quinn administration was hoping a state appeals court would bail it out of a legal jam involving health insurance contracts for state employees, it is sorely disappointed.

A three-judge appeals court this past week unanimously upheld a lower court's order blocking Quinn's office from implementing a new self-insurance plan that would require many thousands of Health Alliance patients to find a new insurer.

The question now confronting Gov. Quinn is whether he wants to continue to fight a costly, protracted and essentially pointless legal battle that he'll likely lose or cut his losses and start the bidding process all over again.

If he's smart, Quinn will extend the temporary insurance contracts now through June 30, 2012, and start the rebidding process all over again.

There have been enough legal and process questions raised about the original bidding decisions that it's best to start from scratch. Doing that would not necessarily be conceding error on the administration's part, only that it's the best solution given existing circumstances.

The court decisions, however, have been helpful because they have affirmed, at least at first glance, that a bipartisan state legislative committee (the Commission on Government Forecasting and Accountability, aka COGFA) has the authority to approve or disapprove administration recommendations to move from coverage provided by health maintenance organizations, like Health Alliance, to a self-insurance program.

The administration took the foolish position that it could act unilaterally on the issue even though state law clearly states that it can do so only "with advice and consent" of the commission. It's always refreshing when judges rule that the law actually means what it clearly says.

Obviously, the policy envisioned in the statute is a consensual executive/legislative arrangement manifested by the commission's power to reject a recommendation.

The Quinn administration argues that the self-insurance is the better and cheaper way to go. If so, it should have no fear of a new bidding process.

This dispute, which has generated considerable uncertainty among more than 100,000 state employees about their health insurance, began after the state rejected bids from the Health Alliance and Humana HMOs.

The state awarded the contracts for self-insurance to PersonalCare and Health Link. For residents in northern counties, it's offering HMO coverage through Blue Cross and Blue Shield.

Health Alliance and Humana filed an administrative challenge to the bidding process that was rejected. Their subsequent legal challenge was based on COGFA's decision to block the self-insurance proposal.

It's become a surprisingly bitter political and legal battle among the various parties. For the public, it's mostly incomprehensible by virtue of the insurance and legal jargon that's been thrown around.

But people do understand the issue of their health coverage, and the worry that's been generated has been considerable.

It's time for the Quinn administration to concede the obvious. The original bidding process has not worked as hoped. It's time to start over.