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Group health insurance program is in very big trouble

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Illinois

* COGFA takes a look at the state employees group health insurance program…

As of February 28, 2017, the amount of SEGIP claims on hand is $4.2 billion and growing approximately $200 million per month. The current FY 2017 payment cycles are:

- CIGNA claims: 615 days for preferred providers, 692 days for non-preferred (CMS projects 450 days and 525 days for FY 18)
- Managed Care claims: Approximately 12 to 19 months, depending on the provider (CMS projects 17 to 28 months for FY 18)
- Prescription/OAP claims: up to 529 days for Prescriptions, 329-362 days for OAPs (CMS projects 465 days for Prescriptions and up to 480 days for OAPs in FY 18)
- Dental claims: 220 days for network claims, 383 days for non-network claims (CMS projects (250 and 450 days for FY 18)

* More bad news…

In FY 2009, the annual liability per participant in the group health insurance program was $5,893.

According to CMS, the estimated liability per participant for FY 2017 will be $9,453, a large increase. This is in part due to much higher interest payment liabilities projected to total $493 million in FY 2018

posted by Rich Miller
Tuesday, Apr 4, 17 @ 11:27 am

Comments

If the state is not going to pay, then stop taking the cas out of the checks. This is not insurance.

Comment by Red Rider Tuesday, Apr 4, 17 @ 11:31 am
This is what happens when you don’t have enough revenue to pay your bills and you start “borrowing” from every source you can find. Increased revenue for the State is a mandatory.

Comment by RNUG Tuesday, Apr 4, 17 @ 11:32 am
Did Rauner urge for this article to be posted after the AFSCME ruling?

Comment by Ok Tuesday, Apr 4, 17 @ 11:35 am
What’s going to happen on April 15th? Hope you weren’t waiting for that refund.

Comment by Red Rider Tuesday, Apr 4, 17 @ 11:36 am
We know WHO wears the jacket for this in the end… BVR the buck stops here!!! A Carhart and ugly plaid shirt won’t hide this debacle.

Comment by Wow Tuesday, Apr 4, 17 @ 11:37 am
Kinda like shorting the pension payments. Just causes more immediate harm. And potentially life or death.

Shakin up Springfield
Winnin
Gettin competitive

Comment by Henry Francis Tuesday, Apr 4, 17 @ 11:45 am
Where the demand from the governor that providers be paid. Right not the IT gurus.

Comment by say what Tuesday, Apr 4, 17 @ 11:45 am
–Increased revenue for the State is a mandatory. –

That would include increased insurance premiums for state employees.

Comment by Bazinga Tuesday, Apr 4, 17 @ 11:47 am
So how far do we as citizens of this state, who pay taxes (and expect services for those taxes) need to be pushed? What will it take? While the governor might believe that this is the way to get what he is demanding, it doesn’t appear to be what anyone else wants. Where is the pushback? Enough of this everyday list of newest victims.

Comment by Anonymous Tuesday, Apr 4, 17 @ 11:52 am
So as I bring my 21 year old to the oncologist in an hour, I can only pray that his cancer hasn’t returned (as I am fearing) as we have state insurance.

Comment by Anon Tuesday, Apr 4, 17 @ 11:54 am
Why not have the state not be self insured and instead pay premiums towards private insurance? That is kinda what Teamsters did.

Comment by Crispycritter Tuesday, Apr 4, 17 @ 11:55 am
Interest payments should not be attributed to the cost per participant metric. Late payments are on the state and I believe are actually coded as a separate expense.

Comment by Markus Tuesday, Apr 4, 17 @ 12:00 pm
“If the state is not going to pay, then stop taking the cas out of the checks. This is not insurance.”

Because that would change all of those very long delays to “???”

Comment by Ron Burgundy Tuesday, Apr 4, 17 @ 12:01 pm
The state needs to stop the self-insurance and buy actual insurance for the employees, kicking in a portion of the premium. Of course, that would mean they need to actually pay the premiums and won’t have the money they withhold from paychecks to use for something else

Comment by Anonime Tuesday, Apr 4, 17 @ 12:08 pm
What exactly is Rauner’s plan to get out of this mess? And why isn’t this the #1 question?

Comment by From the 'Dale to HP Tuesday, Apr 4, 17 @ 12:10 pm
- From the ‘Dale to HP - Tuesday, Apr 4, 17 @ 12:10 pm:

“What exactly is Rauner’s plan to get out of this mess? And why isn’t this the #1 question?”

Ooh, I got this! The answer is term limits. Term limits are going to pay all these bills, apparently.

Comment by illini97 Tuesday, Apr 4, 17 @ 12:15 pm
Are any of these providers in VAP? Somevody’s getting fat off the juice.

Comment by wordslinger Tuesday, Apr 4, 17 @ 12:16 pm
Medical providers are going to earn a lot of interest.

Comment by Anonymous Tuesday, Apr 4, 17 @ 12:16 pm
I believe the state is self-insured.

Comment by Anonymous Tuesday, Apr 4, 17 @ 12:18 pm
Again it’s killing the parents so that one can have leniency for orphan status

Comment by Honeybear Tuesday, Apr 4, 17 @ 12:21 pm
The best and final offer for AFSCME doubles or more than doubles the premiums and cosst that the employee would pay. The administration keeps saying that the health insurance costs are not fully paid by the employee and employer premium shares. However, at this point, how can you tell? We are so far behind because the employer (the state) IS NOT paying their premium share at all. Therefore claims are not getting paid, and interest is accumulating on every claim filed for years and years past.

CIGNA, Healthlink and at least 1 other managed care plan are self-insured plans where the claim money comes from a state fund and the ‘insurer’ (for example, Healthlink) just administers it, sends the payment on to the provider and deals with the provider contracts, all for a fee.

Comment by thoughts matter Tuesday, Apr 4, 17 @ 12:21 pm
RNUG. Increased co-pays are also a must.

Comment by blue dog dem Tuesday, Apr 4, 17 @ 12:22 pm
== That would include increased insurance premiums for state employees. ==

== Increased co-pays are also a must. ==

Traditionally, those items are part of the AFSCME contract.

Guess they won’t change until there is an actual contract in place.

Comment by Anonymous Tuesday, Apr 4, 17 @ 12:34 pm
Rauner. Out. Next!

Comment by El Conquistador Tuesday, Apr 4, 17 @ 12:45 pm
Increased copays help reduce costs where treatment is optional. We have avoided the emergency room to avoid the $250 copay.

When you are being treated for cancer, copay is just a hassle. How much of the medical cost is for unavoidable big ticket items like cancer?

Comment by Last Bull Moose Tuesday, Apr 4, 17 @ 12:50 pm
== Why not have the state not be self insured and instead pay premiums towards private insurance? ==

== I believe the state is self-insured. ==

The CIGNA administered Quality Care plan is the State “self insured” plan. The other HMO & PPO plans are normal health insurance.

As you will notice looking over the numbers, it is the QC plan that is furthest behind in payments. That has been true for a long, long time because the State (when it did have a budget) only appropriated enough money to pay just part of the actual claims every year, so the employee health care hole just kept getting deeper and deeper.

And there is a reason for the QC plan’s popularity; it is the only plan that fully covers you when outside the State of Illinois. All the other plans only cover emergencies out of state.

Note: in some areas contiguous with out of state metropolitan areas, there are HMO / PPO plans that cross over that far.

But the bottom line is state health insurance is only good in the state. This is due to federal and state rules about not crossing state lines, which also limits competition and potential cost savings. Maybe health care reform, if it ever happens, will address the out of state issue.

Comment by RNUG Tuesday, Apr 4, 17 @ 12:51 pm
Word, yes, and yes.

Comment by Arthur Andersen Tuesday, Apr 4, 17 @ 12:59 pm
AA, once the pump is primed, getting paid late with interest on a regular basis ain’t so bad if it’s an investment and not a matter of keeping the lights on.

Comment by wordslinger Tuesday, Apr 4, 17 @ 1:08 pm
Huge problem for Illinois brought to you by a nasty racket known as Health Insurance.

Probably half of these balances are just from a lack of competition, lack of transparency for the consumer, etc.

This link has a very refreshing view on how to rock this crap for a patient/provider win.

I sure wish Illinois could lead the way in some of these reforms.

https://market-ticker.org/akcs-www?post=231949

Comment by cdog Tuesday, Apr 4, 17 @ 1:17 pm
I wonder why the various medical providers are still providing services? From a strictly financial point of view they should have stopped taking those on the state plans months ago.

Comment by Hit or Miss Tuesday, Apr 4, 17 @ 1:20 pm
oh, I got this workers comp redu, that will get us out of the mess, hey maybe I could pay Deloitte out of this fund, or maybe a few more Superstars,
# Do Your Job

Comment by Living it daily Tuesday, Apr 4, 17 @ 1:31 pm
Is this only talking about state employees in the Quality Care Health Plan or does this also concern the employees covered by a HMO (like Health Alliance)?

Comment by Me Again Tuesday, Apr 4, 17 @ 1:44 pm
If you download the report that Rich has linked and go to Appendix 3, you can see all the plans that CMS has in store for state employees; the deductibles, copays and premiums.

Comment by 332bill Tuesday, Apr 4, 17 @ 1:57 pm
==I wonder why the various medical providers are still providing services?==
I’ve had two drop me in the past 2 weeks. Not to mention the multiple threats of collections.

Comment by NC guy Tuesday, Apr 4, 17 @ 1:58 pm
== Is this only talking about state employees in the Quality Care Health Plan or does this also concern the employees covered by a HMO (like Health Alliance)? ==

It’s everybody, but QC is the worst. The State is also behind on paying the PPO’s/ HMO’s their premiums.

I don’t know for sure, but it is likely the HMO’s/PPO’s are only getting paid premiums from the cash that the employees are paying in.

Comment by RNUG Tuesday, Apr 4, 17 @ 1:59 pm
Many doctors will not take state insurance. They don’t like waiting for years to get paid. And the insured don’t appreciate getting late payment warnings with interest attached. Meanwhile, I think I can hear Rauner laughing.

Comment by Anonymous Tuesday, Apr 4, 17 @ 2:14 pm
RNUG - Tuesday, Apr 4, 17 @ 12:51 pm: Healthlink does not pay any bills until the state releases the money. In my book, that’s self insured. I know this for a fact from checking up on my bills. It looks like they are paid but if you did a little deeper, they really aren’t

Comment by anonime Tuesday, Apr 4, 17 @ 2:20 pm
“Are any of these providers in VAP? Somevody’s getting fat off the juice.”

From the Health Alliance June 30, 2016 financial report “Primarily pursuant to the Vendor Payment Program and the Vendor Support Initiative, Health Alliance has sold $87,787,718 in face amount of Illinois Receivables out of a total of $505,373,750 generated in 2014, $362,455,546 ….out of a total of $536,217,248 generated in 2015, and $134,951,607 ….out of a total of $266,975,574 generated through June 2016″

Health Alliance by the way is owned by Carle hospital, one of the top ten profitable non profit hospitals in the US.

Comment by CapnCrunch Tuesday, Apr 4, 17 @ 2:28 pm
– Is this only talking about state employees in the Quality Care Health Plan or does this also concern the employees covered by a HMO (like Health Alliance)?

It certainly includes HealthLink Open Access. My daughter had to go to the emergency room, and now there are about $25,000 dollars that our insurance should pay, but we may have too.

By the way, does anyone know if this has been tested in court? The Affordable Care Act says (I think) that insurance has to pay certain minimum benefits, and at the moment our insurance is only “paying” in some abstract sense that does not actually involve handing over money. Is this legal?

Comment by Anonymous Tuesday, Apr 4, 17 @ 2:34 pm
If we had a functioning state government, they’d sell bonds to catch up on the unpaid medical bills and get the late payment charges under control. Of course they’re not going to do that, and it will be even harder once the bond rating gets knocked down again.

Rauner’s indifference to all this is appalling.

Comment by tobias846 Tuesday, Apr 4, 17 @ 3:23 pm
== If we had a functioning state government, they’d sell bonds to catch up on the unpaid medical bills and get the late payment charges under control. ==

That would have to be one huge offering, what with $4B+ in health insurance and another $8B+ in other backlogged bills. And in today’s poisoned financial environment, it would need to have a dedicated revenue stream (from, say, a 0.25% income tax surcharge) just to get a semi-reasonable rate. Honestly, the time to have done that kind of bond deal was either last year or the the year before.

Comment by RNUG Tuesday, Apr 4, 17 @ 3:33 pm
Dental repayment stimates are way off. I’m waiting on a repayment from about a year and a half ago.

Comment by retiree Tuesday, Apr 4, 17 @ 3:55 pm
Does this backlog apply to Teachers Retirement Insurance Program as well? Also Cigna

Comment by Anonymous Tuesday, Apr 4, 17 @ 4:01 pm
This is outrageous. However, there are developments. First, there is a lawsuit in Cook County on this very issue. It’s in the motion stage. Second, at least for HealthLink members, there is a plan where a private company pays 90% of the balance owed to provider immediately in exchange for keeping the interest. I personally called that company last month as was advised they are accepting applications from providers.

Comment by No Raise Tuesday, Apr 4, 17 @ 4:08 pm
Every time you think the Rauner agenda has hit bottom something like this comes along to show that things can only sink further.

Comment by Eddie Spaghetti Tuesday, Apr 4, 17 @ 6:38 pm
== Does this backlog apply to Teachers Retirement Insurance Program as well? Also Cigna ==

CIGNA administered Quality Care is the one that is furthest behind. If I was a TRS retiree, I would be really mad over the whole thing because that retiree is paying the full cost of the insurance minus the portion that was pre-paid via TRIPS (unlike a SERS retiree that gets the insurance mostly premium free).

Comment by RNUG Tuesday, Apr 4, 17 @ 7:44 pm
TRIP (teachers retirement insurance program) is expensive. So that’s why! my neighbor seems to think that retired teachers get lifetime free health insurance. Tempted to shove my bill in her face.

Comment by AnonymousOne Tuesday, Apr 4, 17 @ 7:57 pm
I am a SURS retiree collecting a pension, and am entitled to premium-free health insurance, but I also can get health coverage from the university where I currently work so I have opted out of the state coverage. As I see it the quality care health plan is basically worthless to me - not sure how I would convince doctors here in Virginia to wait 2 years to get paid. The only bit of good news (for now, because this too can change) is that once I turn 65 and get on Medicare, I can get on the Illinois TRAIL, which is a Medicare part C plan into which the state pays premiums and where there aren’t any payment delays. Many retirees complained when those eligible for Medicare were forced off the QCHP and into TRAIL, but the latter looks pretty good to me now.

Comment by Andy S. Tuesday, Apr 4, 17 @ 10:02 pm
“For FY 2018, the State has proposed numerous changes to the existing system of insurance plans and employee options…The current FY 2017 insurance plan benefits would be the new “Platinum” plan, which would increase monthly plan premiums by 120%. This is only a minimum increase, as most Platinum plans will have a higher increase as a percentage of the FY 2017 monthly premium.

Do we even need to read beyond this section? Yikes!

Comment by anonymous Tuesday, Apr 4, 17 @ 10:11 pm
Anon 10:11, read the whole thing. You won’t have to take Platinum and pay a lot more. You can take Silver, the closest thing to the status quo, and pay a bit more, or Bronze, and pay zero more. Now, don’t expect Platinum copays, service levels or deductibles on the Bronze tier.

Comment by Arthur Andersen Tuesday, Apr 4, 17 @ 10:50 pm