"We were shocked and surprised, we certainly weren't expecting that decision from the state," explained Jeff Ingrum, president and CEO of Health Alliance Medical Plans.
The Illinois Department of Healthcare and Family Services (HFS), which is in charge of state worker health plans, announced it will save $1 billion dollars in the next ten years with new Insurance contracts. It said In the next budget year, $120 Million will be saved with benefits for state employees, dependents, and retirees.
The state signed new contracts with four managed care organizations including two HMO service plans through Blue Cross Blue Shield (BCBS): BCBS HMO Illinois and BCBS Blue Advantage.
It also signed separate contracts for Open Access Plan with HealthLink and PersonalCare. All the contracts are expected to start July 1.
Health Alliance along with Humana insurance programs will no longer be the states HMO provider after June 30.
"I can't really quite frankly think how we could have not been a better partner to the state of Illinois, that they would look at Health Alliance as not a good cost effective option," explained Ingrum. He said communication between the company and state was non-existent and found out about the switch in a press release.
The $1.1 billion operation said the state contract makes up one-third of it's membership. The company said it would lose $450 million from state's decision.
The statement from HFS said, "Five proposals were received and evaluated for HMO services, with the two Blue Cross Blue Shield proposals receiving the highest scores based on a combination of technical responsiveness and price."
Health Alliance argued the statement wasn't true and clients will have to pay 70 percent more in premiums and out-of-pocket cots to keep preferred doctors and hospitals like Carle, Springfield Clinic, and McDonough District Hospital in Macomb.
"The choices left for the state clients, the most likely outcome, they will be going into programs that will cost the state more money that will not save the state what they're claiming," said Ingrum.
HFS said it will mail letters to insurance holders at the end of the month to explain what happens next. It also stated that members of the four group insurance programs will still be able to select their health plans in May during the Benefit Choice period.
Many people who work for the state, said they are worried they won't be able to see their doctor.
"People really need to understand that just because you change health insurance companies, does not necessarily mean you'll have to change your doctor," explained Claudia Lennhoff, President of Champaign County Health Care Consumers.
She said what will happen is hospitals, like Carle, will have to negotiate with the new health insurance companies in order to retain its patients.
In a statement Carle said Health Alliance remains an important part of the Carle system but did say, "If the state's decisions stands, there will be ways to continue seeing Carle physicians, but the plans and costs will change."
Carle said it has a long standing contract with Blue Cross Blue Shield for inpatient and outpaitient hospital services.
"If we do not retain the state contract we could continue to service our non-state clients, and certainly want to reassure them that we will be there for them and continue," said Ingrum.
Health Alliance plans on protesting the states decision of the Protest Review Office (PRO) because it believes the facts are unreliable.
Central Illinois lawmakers are also working to stop the move. State Representative Chapin Rose (R -Charleston), said the governor isn't thinking about the people who would be affected down state.
"One of the comments in the news media this morning from the administration was well, we picked some of these vendors because they have strong provider networks in Chicago. We'll that's great, there aren't any state employees in Chicago. Where are your universities, downstate. Where are your roads, downstate. Where is your state capitol, downstate!" explained Rose.
State Representative Naomi Jakobbson (D-Urbana) is also planning a meeting tomorrow to convince the governor to reconsider the decision.
This isn't the first time Health Alliance has gone through this. Former Governor Rod Blagojevich tried to cut the insurance company in 2004. After many protests, it didn't happen. Health Alliance has had the contract with the state for 30 years.