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State’s unpaid employee health insurance tab rises to $5 billion

Wednesday, Oct 4, 2017


Over the past fiscal year, the lack of an enacted budget has resulted in the State Employee Group Insurance Program (SEGIP) building up a large backlog of unpaid claims. With the passage of a state budget, money has been made available to pay bills in a timelier manner. However, there has not been sufficient funding provided to fully pay down the backlog of invoices accumulated over the course of the budget stalemate. Accordingly, the total of claims held by the State has risen from the last update provided by the Commission. As of the end of September, approximately $5 billion in SEGIP claims were being held by the state from various insurers, organizations, and companies. […]

Concurrently, the estimated time for claims to be held was 523-889 days for Managed Care/Medicare Advantage, 587-643 days for Open Access Plans, and 693-770 days for CIGNA.

According to COGFA, the state owes $600 million in interest on those unpaid bills.

- Posted by Rich Miller        

  1. - cdog - Wednesday, Oct 4, 17 @ 9:12 am:

    I’m sure Amazon gives extra points for this classic Illinois snafu SOP. /s

  2. - Honeybear - Wednesday, Oct 4, 17 @ 9:17 am:

    No responsible adult would intensionally not pay their bills to create the crisis which facilitates a divorce and destruction of their spouse
    Labor and management
    Public and private sector
    Republican and Democrat
    Executive and legislative
    These parings are like marriages
    The path of perfidy
    Has led us to dysfunction
    And people are suffering

    My coworker is missing her 4 bottom teeth
    She can’t afford to pay upfront
    For the dental work that she is paying for out of her paycheck
    The indignity that she suffers

    Rauner stokes the crisis
    Rauner perfidy/lies facilitate it.

    One Percent Solution
    Republicans must atone and purge
    Don’t double down on perfidy
    And will destruction

  3. - DuPage - Wednesday, Oct 4, 17 @ 9:19 am:

    This doesn’t even count the amounts the state owes to the TRS and SURS/CIP insurance. (Retired teachers and retired community college employees.) They are funded by a combination payroll deduction of active employees matched by employer contributions by the schools, community colleges, and a portion put in by the state. The state has not paid their share, so the bills take about a year or more to get paid.

  4. - UIC Guy - Wednesday, Oct 4, 17 @ 9:19 am:

    I think it’s important to add that these debts carry interest—at 9%, in most cases. Given that the state can issue tax-exempt bonds at less than half that rate, this is astonishing mis-management. (Maybe a business person should become Gov./s)

  5. - Dan Johnson - Wednesday, Oct 4, 17 @ 9:26 am:

    We should use the Medicare/CMS payment schedule to ensure we are paying the right amounts for each procedure.

  6. - Cancer survivor - Wednesday, Oct 4, 17 @ 9:27 am:

    Well I just lost just over $1000 on October 1st in flex spending. I see a team of doctors every six months as part of my follow up treatment. Knowing I would face hefty medical bills, I maxed out my flex spending option.

    As a state employee, the insurance cost is taken out of my paychecks but the state is not paying the insurance companies. I get bills from the service providers but since insurance isn’t paying them, what should be covered by insurance is not figured into the bills I receive.

    My flex spending would not approve reimbursements until the bill has been settled with insurance. I still have a number of bills that have yet to be paid and the deadline for submission for FY16 was Oct. 1st. With flex spending, you use it or lose it.

    I hope to appeal but after speaking with the flex spending people, they said it is highly unlikely. Needless to say, I didn’t opt in for this fiscal year.

    Thanks Rauner!

  7. - RNUG - Wednesday, Oct 4, 17 @ 9:28 am:

    And a lot of that is actually owed to small medical offices and individual employees and retirees, especially those in the plans (Cigna administered Quality Care and Delta Dental) the State self funds. Dental is running about 2 years behind.

  8. - Perrid - Wednesday, Oct 4, 17 @ 9:30 am:

    @Dan, I don’t know that the State pays the medical bills themselves for ANY of the plans (correct me if I’m wrong). The State buys (really good/expensive) insurance, and then the companies pay for the services themselves. So the payment for each service would depend on the insurer.

  9. - Arthur Andersen - Wednesday, Oct 4, 17 @ 9:39 am:

    RNUG, the link to COGFA’s report shows who is owed how much. Health Alliance is #1 with $1.3 billion. Cigna is about $650 million and Dental $150 million total. Interesting reading.

  10. - cdog - Wednesday, Oct 4, 17 @ 9:53 am:

    Reading these comments, it seems like there is a good argument for additional class action lawsuits.

    What’s the status of the Medicaid providers lawsuit that’s in the federal courts? Wasn’t Mendoza ordered to pay those?

    There should be more classes and more lawsuits.

    Too many being damaged by this reckless Illinois form of government that needs a robust reality check.

  11. - City Zen - Wednesday, Oct 4, 17 @ 9:56 am:

    ==My flex spending would not approve reimbursements until the bill has been settled with insurance.==

    This is a big deal. Employees must be able to utilize the pre-tax benefits of flex.

  12. - Sir Reel - Wednesday, Oct 4, 17 @ 10:09 am:

    $600 million in interest. $600 million that could’ve been spent on something else.

    Next time I hear “waste and abuse,” I’ll know what it means and who’s responsible.

  13. - RNUG - Wednesday, Oct 4, 17 @ 10:42 am:

    == I don’t know that the State pays the medical bills themselves for ANY of the plans (correct me if I’m wrong). ==

    The Quality Care fee for service plan is the State itself; they just pay CIGNA a fee to administer it but all the payments are State money. The State has shorted the budget for it for many years.

    The other plans are PPO and HMO insurance through various companies like Health Alliance, United Healthcare, Blue Cross, Coventry, etc. Even though the State is behind paying them, they’ve done pretty decent on paying claims.

  14. - Sue - Wednesday, Oct 4, 17 @ 10:47 am:

    Were in worse shape then PR. Invite Trump to Illinois and maybe he will insist we also wipe out our unpaid debt

  15. - Thoughts Matter - Wednesday, Oct 4, 17 @ 10:52 am:

    Regarding the flex benefits. I have been going to Healthlink website and printing off the Explanation of Benefits once the claim is processed. That’s long before they actually pay it. I then send the explanation of benefits to my flex plan to get the amount I wil be responsible for. I then pay that to my provider. Those explanation of benefits are only available online for a year, so you have to check often. We no longer get them in the mail as we used to. Please check into that with your specific carrier.

  16. - Honeybear - Wednesday, Oct 4, 17 @ 10:54 am:

    Cdog- here’s the thing. The majority of my coworkers don’t have the time or the money to file suit. We just want to do our jobs. Never mind that if Rauner wins the suit he would fire us.

    We just have to take it. RNUG is right. Delta dental is two years behind. My girls braces just got paid. For two years I got collection calls.

    I just had to take it.

    Is that the way you treat employees?
    I know you wouldn’t.

    If Rauner gets the 5th district Appelate to remove the stay and Rauner implements the contract
    I’ll pay 120% for the privilege of not having my medical providers paid
    Plus I can’t even strike because it’s illegal to strike over pay or benefits
    Again I as a state worker just have to take it.
    Only you Republicans
    Can stop this
    Abandon Rauner
    Abandon IPI and proft
    Abandon perfidy
    Abandon austerity and squeeze the beast
    Abandon zero sum politics
    Value people
    Value those who serve
    Engage in governing and the public good
    Peer reviewed
    You let a stranger in your house
    He trashed your house and besmirched
    Your values
    Throw him out

  17. - RNUG - Wednesday, Oct 4, 17 @ 11:11 am:

    -Honeybear-, reading your 10:54 post brings a song to mind. If we consider the State our house and Rauner the caretaker we hired, then Gypsies in the Palace is an apt description of how he has cared for the State … except he hasn’t finshed cleaning up his mess.

  18. - cdog - Wednesday, Oct 4, 17 @ 11:13 am:

    Hb, we are mostly in agreement, not completely, but mostly.

    My point is that history shows us the only way to get Illinois to act responsibly seems to be through the judiciary.

    The executive and legislative branches need to be held responsible for their damaging incompetence.

  19. - Honeybear - Wednesday, Oct 4, 17 @ 11:34 am:

    Thanks RNUG I’ll listen to it at lunch! Rauner will never clean the damage. It will take decades to recover. God help us if another economic downturn happens or God forbid a war.

    Cdog- I actually hope that we always find something to disagree on.
    It’s when strong principled opponents wrestle democratically that the most vibrant temporary better is derived.

  20. - Generic Drone - Wednesday, Oct 4, 17 @ 11:58 am:

    Im also wondering if any of the life insurance companies are getting paid and if they are still honering the terms of said insurance if payments have been skipped. Anyone have an idea?

  21. - Anonymous - Wednesday, Oct 4, 17 @ 12:11 pm:

    Amazing that workers who are supposed to provide services to people of this state are treated as non people themselves by their employers. When they call them public servants, they aren’t kidding. Serfs and lords might be more appropriate.

  22. - Texas Red - Wednesday, Oct 4, 17 @ 12:57 pm:

    “Delta dental is two years behind”

    Sorry HB, while your situation is unfortunate, the rest of us non-state employee residents are suffering just as much and these thing impact us all not a select few. I’m talking about all the negatives of living in what is essentially a failed state, high taxes, decreasing population, crumbling infrastructure, Universities that are overpriced and shrinking, pension liabilities that eat up more and more of local govt budgets, 14 billions in unpaid bills….

  23. - HangingOn - Wednesday, Oct 4, 17 @ 2:47 pm:

    == these thing impact us all not a select few==

    Yes, they also impact state workers. So add all those things you listed to what HB said.

  24. - Honeybear - Wednesday, Oct 4, 17 @ 2:55 pm:

    Wow you are one bitter, resentful hate filled person
    Name anyone who pays for insurance in every paycheck
    And yet their doctors/medical providers haven’t been paid in two years
    All illinois residents aren’t impacted by this.
    My God the perfidy
    5 billion dollars stiffing the doctors/medical providers in
    my coworkers missing 4 bottom teeth
    And can’t pay upfront to correct it
    Wow the callous disregard
    You ability to disassociate yourself
    Is stunning
    So glad I don’t live with you or know you
    I don’t know how anyone could
    Your callousness and resentment
    is insufferable.
    I hope Rich lets this post
    Somebody needs to stand up to you
    And tell you off

  25. - Scared senior - Wednesday, Oct 4, 17 @ 3:04 pm:

    I am a retired state worker with a fixed income and pay a dental insurance premium every month.
    I need new dentures but have not been able to come up with the full amount up front and my dentist’s office, a small independent one, can not afford to front the money for two years until the State’s self funded dental insurance system pays. Imagine if a self insured private employer took your premiums every month and you still could not get care because claims were not being paid for over one to two years and you not being able to afford needed care or waiting for two years to be reimbursed.

  26. - Honeybear - Wednesday, Oct 4, 17 @ 3:30 pm:

    Scared senior- I am so so sorry you have to deal with that. You deserve better. Thank you for your service to our state and disregard the disparaging comments made by resentful trolls on this site.
    You are so worth fighting for
    You are so worth standing up for
    You worked hard for us and it’s our turn
    To work for you.
    People like Texas Red have regard for
    Service, duty, commitment
    They take for granted
    and expect more for nothing
    They resent civic duty, service and commitment because
    Because it calls them to give
    So that others might do better.
    It is a profound selfishness
    That I am going to start calling out
    If we have found the courage to call our sitting Governor a liar
    We need to have the courage to give full throated rebuke
    To those who live and work
    only for themselves

  27. - Honeybear - Wednesday, Oct 4, 17 @ 3:48 pm:

    Sorry, “have NO regard for”
    Service, duty, commitment

  28. - No Raise - Wednesday, Oct 4, 17 @ 3:53 pm:

    Glad to see this issue discussed. First, there is a lawsuit re HealthLink and balance billing. It’s making its way through the Cook County Circuit Court very slowly. Next, remember, even if the state is late paying claims and even if you need to pay upfront, you still get the benefit of the contracted rate which is very nice. So you pay the contacted rate up front and take the 9% whenever the state pays. You should never have to pay a higher rate as long as you are going to Tier 1 PPO providers, assuming you have a plan like that. RNUG, please keep this issue in the forefront, especially with the bond issue coming this November. I have seen a lot of outrageous proceedings over the past three decades, but having employees pay premiums for insurance that does not pay is the most disgusting action that I have personally been involved with.

  29. - Anonymous - Wednesday, Oct 4, 17 @ 4:49 pm:

    The objective might be to have employees pay for their premiums and not use the service they are paying for. That or hope they die I guess.

  30. - Old Timer - Wednesday, Oct 4, 17 @ 5:05 pm:

    Until state employees and retirees pay higher premiums (just like us in the private sector) this problem is only going to get worse.

  31. - nick - Wednesday, Oct 4, 17 @ 6:17 pm:

    When is the 5th district going rule?
    any ideas?

  32. - Ron - Wednesday, Oct 4, 17 @ 9:08 pm:

    Sue, I really don’t like Trump. But if he absolved IL of it’s debt I would vote for him.

  33. - Honeybear - Thursday, Oct 5, 17 @ 7:16 am:

    Nick, it’s not the ruling. We’ll win the ruling next year if we get to it.

    It’s the Stay that I fear.
    They issued a Stay to prevent implementation of
    the contract.
    All that needs to be done to start Rauners
    Labor war is
    drop that Stay
    Rauner implements the Insurance doubling
    the damage is done.
    The workforce will collapse
    over 320,000
    people hit with a 120% increase
    The court case we will win
    We won’t survive the loss of the Stay

    December is my bet

  34. - Single Mom - Thursday, Oct 5, 17 @ 9:40 am:

    My college age son had an accident at an out of state college that resulted in cut nerves in his hand. It was critical that they do the surgery quickly to avoid permanent loss of use of the hand. My out of state plastic surgeon’s wife calls me wondering when they will get paid on a regular basis. It’s been more than a year since the surgery. I try to point out the value of the interest on the debt they will receive. Why isn’t there a class action law suit against the state? We paid our premiums and they have a contractual obligation to meet.

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