In The News: Senator Frerichs in News-Gazette: Still time to hit 'reset button' on Health Alliance decision
On Sunday, the Champaign News-Gazette published an Op-Ed by Senator Frerichs about the recent Health Alliance decision. In it, Senator Frerichs reacts to new information that reveals HFS did not consider projected cost savings in making their decision to drop Health Alliance. Senator Frerichs also announced his intentions to vote against the changes at the next COGFA meeting. Click "Read More" below to read Sunday's Op-Ed.
Still time to hit 'reset button' on Health Alliance decision
On April 7, 2011, like many of you, I was shocked by the State’s sudden and unexpected announcement that it would not continue its group health insurance contract with Health Alliance. This announcement created a wave of panic in Champaign-Urbana as over 30,000 people suddenly found themselves facing the difficult decision: change my doctor, or pay significantly more for health insurance. Furthermore, if carried out, this decision could devastate a major local employer, putting hundreds of good-paying jobs at risk.
In the midst of all this uncertainty and confusion, many of us were left wondering—why? Over the course of the past few weeks, and through several hearings and meetings, I’ve been seeking answers about why the State would issue such a harsh blow to downstate Illinois. Unfortunately, there weren’t a lot of answers from the Governor’s Office and the Department of Healthcare and Family Services (HFS)—the entities who made and announced the decision.
As far as I could gather, the only justification offered for dropping Health Alliance seemed to be claims of cost savings for the State. The Governor’s Office and HFS claim that by dropping Health Alliance and switching instead to a Blue Cross Blue Shield HMO, the State of Illinois would save $102 million next year and $1 billion over the next 10 years.
Now, there are many valid reasons to doubt these claims of cost savings. HFS based their projected cost savings on some faulty assumptions—mainly, that all 32,500 Health Alliance HMO customers in Champaign-Urbana would make the switch to the new Blue Cross Blue Shield HMO. Unfortunately, the State seems to have neglected one very important piece of information: the Blue Cross Blue Shield network currently does not cover Champaign-Urbana.
To keep seeing their current doctors, current Health Alliance customers would have no choice but to move to a more expensive insurance option, the Open Access Plan (OAP). Instead of creating cost savings, OAP plans not only cost the average family of four over 200% more out-of-pocket, but they actually cost the State more money as well.
But then, just this past week, new information surfaced that eliminates even the cost-savings justification, questionable as it may be.
Health Alliance has formally protested the State’s decision to not renew their contract and requested information from HFS about how the decision was reached. Health Alliance asked that HFS provide “detailed calculations supporting the estimated Year 1 savings of $102 million.” HFS responded, sharing that the “projected cost savings were not part of the evaluation process and were not considered” in the recent decision.
The only justification for dropping Health Alliance that made some sense—a projected cost savings for the State of Illinois—was not even a factor in the decision.
In my view, this new information only further undermines the State’s decision to end its contract with Health Alliance, and only further strengthens my resolve to fight this decision.
As a member of the Commission on Government Forecasting and Accountability (COGFA), I will soon have an opportunity to do just that. COGFA must either approve or reject the proposed changes to the State’s group health insurance plans, including the decision to drop Health Alliance. I will most certainly be voting to reject the proposed changes, and I will encourage my colleagues on COGFA to do the same.
If we are successful and COGFA rejects the new contracts—contracts that exclude a Health Alliance HMO option—the result is essentially the same as hitting the “reset button.” The process should start over and Health Alliance would have an opportunity to re-bid for the State’s group health insurance contract.
My hope is that HFS and the Governor’s Office view this as an opportunity to do the right thing and re-open the process to ensure access to quality, affordable health care for the people of Champaign-Urbana and downstate Illinois.