SPRINGFIELD -- Putting the health-plan choices of more than 200,000 people in jeopardy, a Sangamon County judge on Friday prohibited the state of Illinois from enrolling state employees, retirees and their dependents in new self-insured “open-access” health plans that begin July 1.

SPRINGFIELD -- Putting the health-plan choices of more than 200,000 people in jeopardy, a Sangamon County judge on Friday prohibited the state of Illinois from enrolling state employees, retirees and their dependents in new self-insured “open-access” health plans that begin July 1.


Circuit Judge Brian Otwell issued his order at the request of Health Alliance and Humana, which successfully argued that the state illegally proceeded with new contracts for open-access plans. Those plans are expected to serve most Health Alliance and Humana members whose coverage ends June 30.


Health Alliance and Humana lost out in the bidding process for new state managed-care contracts. Illinois officials have said the contracts will save the state $102 million a year and more than $1 billion over the next 10 years.


State officials said they will file an appeal of Otwell’s ruling on Monday.


Otwell’s order “prevents the state from implementing any self-insured insurance option for group insurance members,” according to Mike Claffey, spokesman for the Illinois Department of Healthcare and Family Services.


Although Otwell ruled in favor of Health Alliance and Humana’s request for temporary legal relief, he   declined to extend the state’s current contracts with the two companies


Alternatives limited


If Otwell’s ruling isn’t overturned and the state doesn’t award new contracts on an emergency basis, the only health plans the state apparently could offer employees July 1 would be Blue Cross and Blue Shield of Illinois’ HMO Illinois and Blue Advantage plans and HealthLink’s Quality Care plan.


More than 200,000 people in the state health insurance program are enrolled in either HealthLink OAP, Health Alliance HMO or Humana HMO.


The state had expected 140,000 or more people to enroll in self-insured OAPs operated by Personal Care and HealthLink under the new contracts.


Other than the appeal, state officials wouldn’t discuss their next steps.


Claffey said information will be posted on the Illinois Central Management Services website “as soon as we have guidance for group plan members.” The website is www.benefitschoice.il.gov.


“Today’s decision has created uncertainty for state employees and other members of the state group insurance program who are currently in the process of making decisions on their health care plan for the fiscal year that starts July 1,” he said.


“We want to stress that we will be working as quickly as possible to resolve the uncertainty and provide managed care to group insurance plan members,” he said.


 


Upheld COGFA


Otwell wrote that a May 25 vote by the General Assembly’s Commission on Government Forecasting and Accountability, which rejected the state’s expanded use of self-insured health plans, was binding. State officials disagreed, citing a recent opinion from Attorney General Lisa Madigan.


Otwell, however, didn’t go along with a section of Madigan’s opinion that said COGFA lacks the power to turn down individual contracts.


Otwell wrote that COGFA’s 8-2 vote was “a declaration to prohibit DHFS from awarding any new self-insurance plans” — including the new OAP contracts.


State Sen. Jeffrey Schoenberg, D-Evanston, one of the two COGFA members who voted “no,” said Otwell’s order is the “opening round in a scheduled 15-round heavyweight bout.”


Otwell said he anticipated his order could lead to confusion for participants in the state’s health insurance plan.


“Such disruption, while highly regrettable, is unavoidable given the time frame presented under the circumstances of this case,” he wrote.


 


Reviewing ruling


R. Mark Mifflin, a Springfield lawyer representing Health Alliance, said he was happy with Otwell’s  ruling.


Health Alliance isn’t responsible for uncertainty about state worker health coverage, he said.


“Health Alliance is only acting to ensure that the state follows the law,” he said. “That was the heart of our complaint.”


Anders Lindall, spokesman for Council 31 of the American Federation of State, County and Municipal Employees, said: “We are reviewing the ruling to determine the impact on health plans available to state and university employees. AFSCME again urges the state to extend the benefit-choice period until participants can be fully informed of their plan options.”


Both Humana and Blue Cross have asked Otwell to rule in the future on the companies’ request that the health-insurance contracts be re-bid because the bidding process was unfair.


Claffey said, “Nothing in the ruling … calls into question the fairness of the procurement process.”


Dean Olsen can be reached at (217) 788-1543.