New Controversial Health Insurance Options

Last Wednesday, state officials declared their intention to go ahead with new, highly controversial health insurance options aimed at state employees in light of the vote of a legislative oversight panel geared at stopping the action.

The resolution stating that the state will not expand self insurance health care options was adopted by The Commission on Government Forecasting and Accountability (COGFA), as supporters stood by the measure, saying that this action would actually stop the health care changes from being able to be implemented, as the resolution includes a new self insured open access plan as a health insurance option for state employees.

The Office of the Governor, Pat Quinn, however, denied the measure, saying that The Commission on Government Forecasting and Accountability actually does not have the legal authority necessary to adopt such a resolution. This finding was seconded by the Department of Health Care and Family Services. As a spokesperson for the Governor stated the intention of the administration to move forward, even the Commission on Government Forecasting and Accountability co chair voted against the resolution, saying that the organization moved past its legal authority in the situation.

The final result of the legal scuffle is that the state will assume the risk of paying insurance claims for state employees instead of insurance companies, as would happen under fully insured plans.

The health insurance contracts for state employees were bid upon early in the year. Two offers from Health Alliance and Humana HMOs were rejected, citing their excessive cost. The state, to replace them, selected Blue Cross Blue Shield and PersonalCare, as well as an open access plan from HealthLink, as the HMOs of choice for the state.

The main focus of the switch was to save the state money, of which reports claim will happen in excess of US $1 billion over the course of the next 10 years.

The Commission on Government Forecasting and Accountability remains unconvinced of the position of the other governmental agencies, with some of the legislative supporters predicting a lawsuit from one or more of the insurance groups that had their offers rejected. Some legislators on both sides have stated this outright.

The government agencies in support of the switch base their findings on independent third party consultations including those by Mercer. They have found that state employees who are actually on HMOs has dropped by 42% and that the open access plans are much more expensive for the state in general.