State agency cannot cover the cost of claims
The Illinois Department of Central Management Services has announced that it will no longer be able to pay state employee health insurance claims without a state budget. The claims are coming from those that receive coverage through the State Employees Group Insurance Program. Since the agency can no longer pay for the claims being made by policyholders, some 150,000 people could face higher out-of-pocket costs associated with their health insurance coverage.
Those with self-insured plans will be hit the hardest by lack of claims coverage
Of the two types of plans that are offered through the State Employees Group Insurance Program, those under the self-insured plan will feel the most immediate impact. Self-insured plans are subsidized by the state, which can no longer cover the cost of health insurance claims. Members will have to handle these costs alone, unless medical care providers decide to lend aid to mitigate the problem. Employers may also be able to cover a portion of the cost of claims, but the Illinois Department of Central Management Services is no longer able to do so. Those with fully-insured plans, which are covered by monthly premiums paid by the state, will continue to receive coverage from their insurance providers.
Hospitals are beginning to pick up the slack on claims payments
Some hospitals in Illinois have already begun to help cover the cost of claims. A few of these hospitals had begun doing so in June of this year in an effort to mitigate the financial impact associated with the cost of health insurance coverage. Illinois has been behind in paying claims for six months, with the state’s claims payment debt now ranging in the tens of millions of dollars. State officials, as well as employers, are looking for a solution to this problem that will benefit employees and ensure they continue to receive coverage.
State continues to struggle with budget issues
Illinois has been dealing with budget issues for some time. Lawmakers have reached an impasse when it comes to outlining a budget for the state, which is one of the reasons Illinois can no longer cover the claims associated with insurance coverage. If the impasse continues, greater financial issues are expected to arise for state employees, especially when it comes to health insurance.