Audit puts Illinois lawmakers in hot water with the state’s insurance companies

Insurance NewsIllinois lawmakers and insurers are coming under fire for an insurance deal that was brokered last year. A new report released this week from the state’s Auditor General, William Holland, has highlighted some serious problems with the insurance deal the state made with Blue Cross Blue Shield. The deal saw more than $7 billion worth of insurance policies held by state employees transferred to the major insurance company. One of the problems is that many of the policyholders caught up in the plan lived in one of 24 counties where Blue Cross Blue Shield does not have primary care doctors.

When the plan was drafted, Blue Cross Blue Shield was meant to compete with other insurance companies to win the policies the state was looking to give away. The insurer would have been required to obtain primary care doctors in the counties where it was lacking such personnel, but has avoided this due to legislative oversight. This is just one of the problems detailed by Holland’s audit, however, as the report found that the Department of Healthcare and Family Services overlooked a conflict of interest between a consulting firm and insurance companies that were competing for the policies.

The report was released on Wednesday this week, as the state was finalizing a settlement with the insurance companies that had lost the competition with Blue Cross Blue Shield. The report may serve as another point of contention for insurance companies and may encourage them to pursue yet another lawsuit as a way to get a second chance at the insurance policies.


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