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Today’s number: $2.8 billion

Friday, Mar 25, 2016

* Clawing out of this hole gets more difficult by the day

Approaching a 10th month without a budget, Illinois has racked up a mound of unpaid claims, about $2.8 billion worth, in its state employee group insurance program.

Payment delays to health insurers and providers are now averaging 15 months, according to Meredith Krantz of Illinois Central Management Services. That’s due not only to the current budget impasse but years of under-funding in the group insurance program that has caused regular payment delays of eight months or longer, she said.

The current hold on claims is split nearly down the middle, with $1.4 billion owed for the state’s self-insured plans, and $1.5 billion for the fully insured plans, she said. Fully-funded plans are the HMOs and Medicare Advantage plans; the self-insured plans include Coventry Health Care Open Access Plan, Health Link OAP, Cigna (Quality Care) and Delta Dental.

As of today, the state owes one local carrier, Carle-owned Health Alliance Medical Plans, $720 million for 16 months’ worth of premiums at $45 million a month, according to Health Alliance spokeswoman Laura Mabry.

- Posted by Rich Miller        

  1. - Trolling Troll - Friday, Mar 25, 16 @ 12:25 pm:

    Collecting the fees but not paying the premiums? Sounds like a sham.

  2. - Earnest - Friday, Mar 25, 16 @ 12:26 pm:

    >Clawing out of this whole gets more difficult by the day…

    And that’s a little thing we like to call “leverage.”

  3. - Ghost - Friday, Mar 25, 16 @ 12:27 pm:

    has anyone fact checked this against prior year cllectiins and payments? seems odd At the same time Rauner wants to cut benefits that same year for the first time their is billions reported in shortfalls…. also is this money that is sitting in an acount but not spent becuase of the lakc of an appropr? as I recall they are collecting the employee premiums but not forwarding them on; almost like they want to squeeze the insurance companies to drop the state or massively raise rates

  4. - Hit or Miss - Friday, Mar 25, 16 @ 12:31 pm:

    I wonder if the insurance companies have, or are, considered canceling the policies for non-payment of the premiums?

  5. - A guy - Friday, Mar 25, 16 @ 12:37 pm:

    At $45M per month in premium. I don’t think so.

  6. - Grandpa - Friday, Mar 25, 16 @ 12:40 pm:

    We are paying our premiums, why aren’t they at least passing those dollars along to the carriers?

  7. - Anonymous - Friday, Mar 25, 16 @ 12:41 pm:

    Delays were already running eight months before all this? Even when we’re ‘good’, we’re still ‘bad’.

  8. - ISP Retired - Friday, Mar 25, 16 @ 12:41 pm:

    How much are they paying in interest?

  9. - Henry Francis - Friday, Mar 25, 16 @ 12:45 pm:

    More businesses being helped by the businessman governor.

  10. - Thoughts Matter - Friday, Mar 25, 16 @ 12:45 pm:

    Grandpa- they aren’t paying the premium because its’ part of the non-existent 2016 budget, and they haven’t yet been court ordered to pay it. So they legally can’t.

  11. - Anon - Friday, Mar 25, 16 @ 12:48 pm:

    This is all a lot easier to process when you consider it in terms of the state’s GDP.

  12. - RNUG - Friday, Mar 25, 16 @ 12:49 pm:

    == We are paying our premiums, why aren’t they at least passing those dollars along to the carriers? ==

    Two answers:

    1) lack of an appropriation

    2) cash flow management

  13. - hisgirlfriday - Friday, Mar 25, 16 @ 12:52 pm:

    If only Illinois had a business-friendly governor who could figure out how to pass a budget and pay bills… maybe our state could even take advantage of all the companies troubled by the social agenda being enacted in places like georgia and north carolina.

  14. - Ghost - Friday, Mar 25, 16 @ 1:00 pm:

    Low taxes have been good for Kansas and Louisiana…..

    So why do we need Durkin and Radango? what exactly is their purpose?

  15. - burbanite - Friday, Mar 25, 16 @ 1:06 pm:

    Hey Rich, read your first sentence again. :)

  16. - FRMRILSIP - Friday, Mar 25, 16 @ 1:06 pm:

    @ISPRetired For FY 16, it’s projected to be about $220 million. For FY 17, it’s about $233 million.

  17. - Saluki - Friday, Mar 25, 16 @ 1:08 pm:


  18. - Vole - Friday, Mar 25, 16 @ 1:09 pm:

    I have asked this question here before and will ask again:

    Are doctors, dentists, etc. who are providing health care services to state employees/retirees needing to increase their fees to everyone as a means of compensating for the very late payments? Are we all paying the price or suffering the consequences of this governmental failure? Particularly in areas of the state where there are higher concentrations of state employees and retirees. I live in such a place and have good reason to wonder about it.

  19. - Another State Worker - Friday, Mar 25, 16 @ 1:11 pm:

    My son who is a dependent on my insurance received services on 2/13/15. We received a collection notice in the mail last week. I had to contact my insurance carrier to get it cleared up. The insurance representative said that they have tried to work with providers and asked that they not send people to collections, but evidently not all providers are agreeing to do that.

  20. - Annonin' - Friday, Mar 25, 16 @ 1:13 pm:

    But insurers and some providers are selling invoices to various bankers who are doin’ vendor assistance without callin’ it that

  21. - The Dude Abides - Friday, Mar 25, 16 @ 1:25 pm:

    With my dentist, I have to pay in full at the time I receive services, then I wait for months for a reimbursement check from Delta Dental when they are finally paid by the state. The wait is increasingly longer.

  22. - burbanite - Friday, Mar 25, 16 @ 1:31 pm:

    Legalize marijuana and tax it. Problem solved. Oh wait, he won’t even expand medical marijuana.

  23. - wordslinger - Friday, Mar 25, 16 @ 1:31 pm:

    The governor is just employing his private sector practices in the public sector.

    Governing by Bustout.

  24. - Flynn's mom - Friday, Mar 25, 16 @ 1:38 pm:

    If you personally are sent to collections, you should sue the state and the governor!

  25. - formerpro - Friday, Mar 25, 16 @ 1:39 pm:

    There is nothing new about this problem, it has been going on for over a decade. Like most of Illinois’ fiscal issues(pension funding, for example!),the problem gets worse the longer we have to wait for a fix. Apparently the providers of the medical and dental services, and the insurers like Blue Cross and Health Alliance, are OK with this state of affairs, or they would call a halt to it. What most don’t realize is that the providers are collecting interest at 0.75% per month on the late payments. That looks pretty good as a receivable on their balance sheet! If you try to explain what Illinois is doing with the state employees group insurance program to a policy maker from another state, they have a hard time comprehending how irresponsible Illinois has been behaving. Large self-funded employers (like Illinois, for the most part) normally pay insurance claims and premiums on time and also have two or three months of reserves in the bank. In effect, Illinois has “negative reserves.” Some day Illinois will come to its senses and embrace basic math. When the big tax increase finally gets here, it will make fiscal sense to use the State’s bonding authority to catch up on ALL of the state’s back bills. With a sensible revenue stream in place the State’s bond rating will improve dramatically and this will be the most cost-effective option. When this can happen is anyone’s guess, seems very unlikely in the current environment!

  26. - wordslinger - Friday, Mar 25, 16 @ 1:43 pm:

    –I wonder if the insurance companies have, or are, considered canceling the policies for non-payment of the premiums?

    - A guy - Friday, Mar 25, 16 @ 12:37 pm:

    At $45M per month in premium. I don’t think so–

    Is that how business works. You’re NOT getting paid so much every month, you can’t afford to lose the business?

    That makes sense to you?

  27. - markg8 - Friday, Mar 25, 16 @ 2:05 pm:

    I met Rauner at a Chamber of Commerce luncheon in Joliet in June 2014. He was supposed to hold a Q&A after his speech but I guess because of the news cameras there he demurred. In the receiving line afterward I asked him where he was going to cut the budget without renewing the temporary income tax hike. He said there was about $1.5 billion in CMS alone that could be cut right away. I looked it up when I got home and the only place I could find money like that in CMS in one place was health insurance.

  28. - ABC123 - Friday, Mar 25, 16 @ 2:06 pm:

    Don’t worry, when the state employees get forced to a “bronze plan” then the backlog will just magically get fixed (snark).
    To answer the question, as someone stated earlier, this issue has been going on for years.
    I have brought this issue up when people argue state employees have health insurance that is too generous. A plan that forces an employee to pay for services up front and wait to be reimbursed (several months to over a year now) can’t really be called too generous in my opinion.
    Does anyone know what would happen if a self funded entity in the private sector did this to their employees? It seems like there should be rules/regulations against things like this happening.

  29. - Ben - Friday, Mar 25, 16 @ 2:12 pm:

    State paid $500,000,000 in late payment interest last year. The late payment interest rate is 1% per month after 90 days.

    The amount state employees pay is not equal to the full “premium”. It is a negotiated amount or a contribution to what would be a full premium amount.

  30. - Steve - Friday, Mar 25, 16 @ 2:14 pm:

    Eventually no one will extend credit to the state of Illinois. Why be a vendor if you can’t get paid?

  31. - Cdog - Friday, Mar 25, 16 @ 2:18 pm:

    If there is no fy16 appropriation, is there also no obligation for the state to pay these bills?

    If the answer is yes and the health service provider also has no standing in demanding fy16 payment, there is also no interest being earned, correct?

    Would health providers then turn to the patient for payment if the state refuses to acknowledge an FY16 bill with no appropriation?

    Anybody loaning money on these receivables is assuming a lot of risk.

  32. - DuPage - Friday, Mar 25, 16 @ 2:20 pm:

    Not to mention the retired TRS and SURS that are zeroed out in the Rauner education budget. These insurance plans were already nearly a year behind, this will delay payment of claims an additional year. Can we blame providers for not wanting to wait 2 years for payment? Quinn was at least reducing the backlog, along with making the pension contributions on time.

  33. - burbanite - Friday, Mar 25, 16 @ 3:29 pm:

    “Would health providers then turn to the patient for payment if the state refuses to acknowledge an FY16 bill with no appropriation?”

    Yes. I have yet to see a doctors office or med. facility that doesn’t make you sign something stating you understand you are responsible for what insurance doesn’t pay.

Sorry, comments for this post are now closed.

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