Capitol Fax.com - Your Illinois News Radar

Some state worker/retiree health insurance costs will skyrocket

Posted in:

Illinois

* This won’t go over too well with state employees.

The Commission on Government Forecasting and Accountability has a new study of the state employee group health insurance program. And by the looks of things, it appears that Gov. Quinn is all but foreclosing the preferred provider health insurance option and attempting to move state workers and retirees to HMOs…

Employees, under the Governor’s FY 2010 budget proposal, would pay increased premiums if they participate in the [PPO Quality Care Health Plan]. Currently, an employee in the QCHP pays an average of $89.57/month.

If the Governor’s proposals are implemented, as shown in Table 8, employee monthly premiums will rise to $309.56 a month or 245.5% and a non-Medicare retire would see their premiums increase from $12.98 a month on average to $582.71 a month on average or 4,389%.

Managed care HMO prices will only rise by about $10 a month, so this rate change proposal is pretty transparent. The change will also apply to legislators, so I’m wondering how that’ll go over.

AFSCME claims that moving just about everybody to HMOs will quickly drive up HMO rates. AFSCME also claims that this change cannot be implemented unless it is approved by the unions.

…Adding… Retirees who haven’t yet qualified for Medicare are shafted either way. Both their PPO and HMO rates are gonna zoom through the roof.

posted by Rich Miller
Tuesday, Apr 21, 09 @ 12:36 pm

Comments

Can’t believe our esteemed lawmakers will go for this one. If Quinn wanted it to pass, he should have left the GA out of the mix.

Comment by Little Egypt Tuesday, Apr 21, 09 @ 12:44 pm
no, Liitle Egypt, they (lawmakers) have the same programs, they don’t get a seperate one. You will remember a few years ago when Blago was going to totally go with one out of state HMO and how well that flew.

Comment by Princess Tuesday, Apr 21, 09 @ 12:51 pm
Princess, I know they have the same program. That’s why the GA won’t go for it because they will feel the increase just like the rest of us. The 11th Commandment - though shalt not dip into the personal pockets of legislators.

Comment by Little Egypt Tuesday, Apr 21, 09 @ 12:59 pm
As a retired teacher, I pay for my insurance through TRIP (Teachers’ Retirement Insurance Plan)which also includes PPO and managed care plans.

I will find out soon what increases will be made to the premiums since the open enrollment time is upon us.

The new booklets with plans and prices are not out yet. The last one issued is online if anyone cares to look at it.

http://trs.illinois.gov/subsections/members/pubs/trip/trip.pdf

Comment by Nearly Normal Tuesday, Apr 21, 09 @ 1:10 pm
Hmmmmm,
From $13/month to $583/month. Not too bad. Well all of you state employees and retirees hated Rod soooooo much and couldn’t wait to see him gone.
You got your wish. Deal with it.

Comment by Bill Tuesday, Apr 21, 09 @ 1:13 pm
Is the QCHP the only PPO plan? Or are there others? And if so, is QCHP the only plan to see the increases?

Comment by Sewanee Tuesday, Apr 21, 09 @ 1:14 pm
Nearly,
You are really in for it and if you have a spouse or dependent, watch out!

Comment by Bill Tuesday, Apr 21, 09 @ 1:16 pm
Bill, does not matter Blagojevich gone and you know it. Same being pushed as was being pushed, this is just round two.

Comment by Princess Tuesday, Apr 21, 09 @ 1:21 pm
The link below has the info in regards to QCHP. Looks like Cigna is the only company providing PPO at present.

http://www.state.il.us/cms/3_servicese_ben_choice/BenefitPlans.htm

Comment by Nearly Normal Tuesday, Apr 21, 09 @ 1:33 pm
This is the right thing to do for the employer (us)for several reasons. First, there is little to no increased costs for those participating in the HMO plans. The only way you experience the increase is by electing to stay in a PPO model program. Part of the reason for this is; because much like in the pension arena, it shifts from a defined benefit model to a defined contribution model of health care.

Second, the incremental annual cost increase each year between a PPO and an HMO are exponetially different. As the employer (again, us) what you are doing is substantially reducing the annual growth in benefits costs.

Comment by Quinn T. Sential Tuesday, Apr 21, 09 @ 2:07 pm
I really like my CIGNA PPO. We fall under the retiree status. I can walk into any doctor and not pay a thing at the time. Sometimes the doctor isn’t accepting CIGNA, but all I do is pay the bill and submit the claim.

Comment by PPHS Tuesday, Apr 21, 09 @ 2:13 pm
Everybody looks at the dollar cost per month and the increases are humongous. No doubt about that.

What needs to be discussed is why such increases are coming. Are fewer in the business any more so we have single bidders? Do the prior premiums reflect the total collections passed through to the contractor, or were there huge employee deductibles, or was the State paying most of that cost separately, and now wants the employee/retiree to cough up (no pun intended) more?

Next question — why aren’t all State employees and retirees, young through doddering, in the health plan? The ones from retirement age through the pre-Medicare year are more expensive to cover. Their premiums should be higher and drop off when Medicare comes in to the secondary coverage cost.

Comment by Truthful James Tuesday, Apr 21, 09 @ 2:14 pm
Once again Filan’s name is all over this. Stick it to the workers.
He’s a lead weight to Quinn. He should be gone. Why hasn’t he been indicted?

Comment by Truth Teller Tuesday, Apr 21, 09 @ 2:21 pm
I agree with Bill. Be careful what you wish for.

Does Quinn need legislative approval to implement these changes to the health plan?

As to AFSCME, if I recall correctly, he or Stermer was quoted as saying that if AFSCME did not agree to (certain) proposals affecting the bargaining unit, Quinn and Co believed they could implement at least some of them anyway.I don’t know if health care for active employees is part of the contract but I suspect that health care for retirees is not. I do know that retiree health care is not protected by the Illinois constitution.

Still, AFSCME makes a lot of campaign contributions and in Illinois that really counts.

Comment by Cassandra Tuesday, Apr 21, 09 @ 2:24 pm
“QCHP is the medical plan that offers a comprehensive range of benefits. Under the QCHP, plan participants can choose any physician or hospital for medical services and any pharmacy for prescription drugs. Plan participants receive enhanced benefits resulting in lower out-of-pocket amounts when receiving services from a QCHP network provider. The QCHP has a nationwide network that consists of physicians, hospitals, ancillary providers, pharmacies and behavioral health services.”

If I remember from my CMS days, the QCHP is an Indemnity plan. The State has been trying to migrate people off this plan for years because the overall costs are much higher to the State (and the employee). This plan allows you to use any doctor in the Country (it is not a PPO). When the report refers to “managed care” it may be referring to both HMOs and PPOs. On the CMS web site, if you look at managed care providers, it lists both. I will admit I haven’t had the chance to read the full report.

Comment by The KQ Tuesday, Apr 21, 09 @ 2:26 pm
Why is it just the employees that are forced onto an HMO? What about all those citizens who are on state assistance for insurance? Do they have to go to an HMO also? How many millions would that save us? Probably not - just sticking it to the employees again. Quinn better get rid of Filan soon. Plus, if AFSCME has a contract that spells out healthcare costs for the next 4 years, how can Quinn simply change it without the Union’s approval?

Comment by lincolnlover Tuesday, Apr 21, 09 @ 2:27 pm
First, there is little to no increased costs for those participating in the HMO plans. The only way you experience the increase is by electing to stay in a PPO model program.

Wrong. As Rich wrote, pre-Medicare retirees get “shafted either way. Both their PPO and HMO rates are gonna zoom through the roof.”

Retirees are on a fixed income. Their budgets cannot handle huge unexpected increases.

Imagine you are retired with more than 20 years in but you are not yet 65. If Quinn gets his way, your annual PPO premium goes from zero to $7,000. Your annual HMO premium goes from zero to $5,000. Keep in mind the average annual pension is $18,000.

If I told you, “Hey, guess what, starting July 1 you’re going to pay 30-40% percent of your total annual income for health care,” there might be a lot of words to describe you (angry, irate, apoplectic), but the best one would be: Uninsured.

Comment by Reality Check Tuesday, Apr 21, 09 @ 2:29 pm
The monthly increase is pretty steep, no matter how you sway it. But part of the story to me is that the state was subsidizing retires to a tune of $570/month for Medicare retirees and $220/month for the QCHP (assuming no state contribution in the new premiums and no inflation from last year- I know, not 100% valid).

Medicare retirees paying $13/month right now is pretty darn sweet. At that level, any increase looks steep. Heck, increasing it to $40/month “TRIPLES THE PREMIUM!!!”. But is that an unreasonable amount to ask them to pay, especially given the financial condition the State is in?

Comment by South Side Mike Tuesday, Apr 21, 09 @ 2:34 pm
Me and my family were on the QCHP a few years ago and changed to Personal Care. Why? Because the State was so extremely late in paying their bills to the medical providers that those providers were requiring me to pay “up front” and get my reimbursement from the State. They said the State paid faster to the employee than they did to the provider. My reasoning was why should I pay twice, once for the premium and then for the service? So I changed and it was the best decision I ever made.

Comment by Little Egypt Tuesday, Apr 21, 09 @ 2:36 pm
=====What about all those citizens who are on state assistance for insurance? Do they have to go to an HMO also? ======

If you mean the IL Medicaid family care, they have all already been moved to an HMO system. This occurred sometime in 2007, if I remember correctly. Many practitioners who were in the PPO-style system did not join the HMO system, thinning further the already strained ranks of physicians who accepted new Medicaid patients. This is an especially large problem for people located in the more rural regions of the state.

Comment by South Side Mike Tuesday, Apr 21, 09 @ 2:39 pm
Why no attention given to Open Access Plans? It’s a tiered service–akin to a combination of PPO/HMO. You receive better coverage at Tier I in-network, medium coverage at Tier II in-network, and less coverage at Tier III out-of-network. It’s a good way to provide some coverage and flexibility, while recognizing that going out-of-network is a financial strain on the system. Seems like a nice alternative, and the report reinforces OAP in the growth and lower cost categories.

Comment by Sewanee Tuesday, Apr 21, 09 @ 2:42 pm
Cassandra employee and retirement health insurance is covered in the contract. The rates listed in the appendix are effective “During the term of this agreement.”

Comment by Reality is Tuesday, Apr 21, 09 @ 2:48 pm
70% of current workers are in HMO plans now. They were not ‘forced’ into it, they simply can not afford QC. When one joins HMO all members of famiy must also be enrolled in same plan. A problem with that is if daughter suzie q if off elsewhere in college, in order to have her insured family takes QC. If said made-up daughter were to be able to get in with a HMO in the county she attends school even when different then her made-up parents, there may be a more wilingness to shift from QC for employees that use QC for this reason.

Yes, Cassandra, healthcare for active employees is part of the contract. And it was what mostly held this last just signed contract up. Contract should have been done by 30 June. After going to arbitrition we got a contract finalized in Sept.

Comment by Princess Tuesday, Apr 21, 09 @ 2:50 pm
I use Health Link OAP because it allows me, my spouse and my child to use either hospital in Springfield (Memorial or St. John’s) and allows us to keep all the same doctors we had either in Tier I or Tier II. It costs more than other HMO’s but it’s still a lot more affordable than QCHP. Plus it insures that we would be covered at at least the Tier III level if, for example, any or all of us got sick or injured while out of town or out of state. I am glad to see that it seems to be working well for the state in terms of cost, so the premium should not have to go up TOO much next year.

Comment by Secret Square Tuesday, Apr 21, 09 @ 2:53 pm
It’s the same all over. Try running a small business and offer health care. At least you know where all the money goes.

Comment by wordslinger Tuesday, Apr 21, 09 @ 3:07 pm
I am on the HMO plan, and it’s the best insurance my family has ever had (2 adults, 2 dependents). I say this is a great way to shave some costs— especially after reading PPHS’s comment above. Non-emergency health care should at least have some inhibitors built in…

Comment by Vote Quimby! Tuesday, Apr 21, 09 @ 3:38 pm
My husband has the state insurance for our family. It’s a good HMO except my doctor dropped me because they won’t pay him what he wants. The emergency room co-pay is sort of riduculous but it’s to keep people from using it as a doctor’s visit. I can sure understand that.

Comment by Little Lucy Tuesday, Apr 21, 09 @ 3:51 pm
Okay, I have read this over and over and I cannot find anything that says to me that retiree HMO premiums are going to go through the roof. What do you mean by this, Rich?? What is “through the roof”?

Comment by Skirmisher Tuesday, Apr 21, 09 @ 4:15 pm
Qinn T. You are no more of the employer than I am as a state employee. You forget that state employees pay taxes also. So don’t give me that moronic tired old phrase that you pay my salary.
Yes Bill this seems like Blago never left and you are right he didn’t because his hatchet man John Filan is still around. I supported Quinn and if asked yesterday I would have been part of those who somewhat support him in the poll Rich posted. But if he continues with his embracing of Filan and sticking it to the state workers I will quickly move to those who strongly don’t support. If he doesn’t get rid of Filan this will be a cake walk for Lisa. He is self destructing in three weeks, I has hoped he coulds offer more.
What is he going to offer the state employees who don’t live in an area served by an HMO. And don’t tell me that all areas are served. The HMO plan map might show the area covered but when you investigate you have to drive eighty miles to a provider.

Quinn said he would not balance the budget on the backs of the state workers. Well apparently he has the same problem with the truth as his predecessor did. If you add the percentage of tax increase that state workers will pay along with every other tax payer, the raise in their pension payment, the furlough days, this increase in helath coverage, and for some what will amount to no health coverage, the state worker is putting more into this than any other taxpayer. Maybe it’s time for a Recall amendment. Who’s next in line?

Comment by Irish Tuesday, Apr 21, 09 @ 4:30 pm
I hope the Governor and AFSCME work something out, because this issue has the potential to create huge labor/management problems. Personally, I believe it is unreasonable to think that retiree health insurance premiums can be held to zero for any retirees, regardless of length of service.

Comment by steve schnorf Tuesday, Apr 21, 09 @ 4:46 pm
If I’m reading it right, the non-Medicare retiree premium is buried in the table on pg 18 under the figure $432.47 as opposed to $0 today. That comes in at $5,200 a year in round numbers. Right now I’ve been helping support my kid & wife, one slightly above minimum wage, the other off work due to pregnancy, to keep them off welfare. If the State raises my health cost like this, I’ll have to quit helping them just to pay my own bills, putting another family on the Illinois welfare system … which will cost the State a hell of a lot more in the long run …

Comment by Retired Non-Union Guy Tuesday, Apr 21, 09 @ 4:46 pm
Something to remember. Not all of the lower costs of the HMOs are explained by how well they manage care. Enrollees in the QCHP are (generally) older and sicker than the HMO population. As those persons are forced into the HMO programs, the costs, and therefore the premiums, for the HMO programs will increase.

Hard to say by how much, but a good actuary could get us close. Maybe COGFA is already looking at that.

Comment by steve schnorf Tuesday, Apr 21, 09 @ 5:02 pm
meant to say retiree non-Medicare HMO premium but left the HMO out …

Comment by Retired Non-Union Guy Tuesday, Apr 21, 09 @ 5:02 pm
Maybe Quinn figures there are not enough non-Medicare retirees to make a fuss. They are the who get hit hardest since their HMO alternative is also so expensive.

To answer my own earlier question, it’s now my understanding that the legislature would have to
pass a bill if retirees are to pay more than 0 for their health insurance. Guess the retirees better get on the phone. And not just to AFSCME.
Maybe they could get AARP to weigh in.

Maybe this is the first offer, so to speak, in
the Quinn efforts to fix the budget vis a vis
state employee costs. Having observed California’s recent budget negotiations closely…I have relatives in LA…I am sure there are many more budget drama episodes to come.

Comment by Cassandra Tuesday, Apr 21, 09 @ 5:03 pm
This has been a long time coming.

When first hired on by the state 20+ years ago, as a young single guy, didn’t really care and had the State/Quality Care plan.

When I got married, still had QC, then as premiums started going up more for QC, switched to HMO.

Back to QC a year after my wife had our baby and one of our primary care doctors stopped taking our HMO.

After a few years, we started researching local doctors and went back to HMO after it was going to cost almost $100 a month more to use Quality Care for our family over HMO.

Overall, our experiences with HMO have been very good.

Except for one billing error while on HMO, never had collections people calling me for money because Quality care hadn’t paid them.

Had 3 different times we got calls while on Quality Care because of providers not getting payment in a timely manner. Of course they say, “Well, send us a check, and we will mail you a refund when Quality care pays.” Yeah right.

Comment by Concerned Voter Tuesday, Apr 21, 09 @ 5:09 pm
I’ve been told that all state retirees who chose to live out of state to enjoy their retirement MUST enroll in Quality Health Care. If this is true, the State should start a HMO for them too.

Comment by SOONaSTATERETIREE Tuesday, Apr 21, 09 @ 5:18 pm
Cassandra, they had two call your rep days last week the 15th and 16th. There are also nine regional meetings co-hosted by a couple unions coming up beginning next week and I’m sure as things heat up buses will start rolling.

May is generally Benefit Choice month and nothing out on it yet. Kinda sucks to be having to make choices when nothing is set in stone yet. Retirees who no longer live in Illinois can not sign up for an HMO, partly why roughly 70% of retirees have QC. Another part if they worked through the years prior to the push of HMO or tried early HMOs and have a fear of not recieving services needed and/or having had experiences with the poor quality HMOs of the past. I choose OFS health plans here in the Peoria area about ten years ago and can not sing their praises high enough, but yeah, there were some real experiences prior to that move for me.

Comment by Princess Tuesday, Apr 21, 09 @ 5:19 pm
I envy you SOONaSTATERETIREE

Comment by Concerned Voter Tuesday, Apr 21, 09 @ 5:34 pm
I’m kind of wondering if the real plan here is to boost the QCHIP pool by adding thousands of otherwise healthy retirees to cover Blagojevich expansions to the QCHIP rolls?

Comment by Commonsense in Illinois Tuesday, Apr 21, 09 @ 5:37 pm
All I can say is welcome to the reality of many businesses. Wish our company had those rates. Our current monthly insurance is $640 HMO. My company covers about 2/3 of that but any additional dependent coverage is 100% on me. Single cost to me is around $250 a month but family coverage kicks to over $1,100 a month and both are going up 16% soon. Many of our peers in our business are dropping health coverage entirely for their employees due to cost. At $89, the state worker has been paying less than 15% of what it currently costs my company. That’s a sweet deal that we simply could not afford. That $12B hole is popping out in many painful areas. More coming.

Comment by zatoichi Tuesday, Apr 21, 09 @ 5:41 pm
How about mandating recipients are in managed care.
Just sayin’

Comment by always anonymous Tuesday, Apr 21, 09 @ 7:55 pm
According to my benefit statement, the state pays $276.65 per pay period for my health insurance. That’s for QCHP. Quinn is asking us to pay more than half of our health insurance. Why not increase the deductible? I can get a tax break that way.

Comment by Emily Booth Tuesday, Apr 21, 09 @ 8:47 pm
Rich, I know the State can always figure a way to change the rules, but I have a question I’ll get to in a minute.

After rereading the commission report, I found the following on page 19 under the key parameters for policy parameters:

“Members should have continued access, on substantially similar terms and condition, to trusted family health care providers with whom they have developed a long-term relationship.”

So my question is, since they seem to be targeting non-Medicare retirees with a grossly different premium than other retirees and employees (table 7), how is that “substantially similar terms” ?

Comment by Retired Non-Union Guy Tuesday, Apr 21, 09 @ 8:49 pm
The earlier comment that most Medicaid recipients in Illinois are in managed careis just plain wrong.

Comment by steve schnorf Tuesday, Apr 21, 09 @ 10:49 pm