Illinois Can't Pay State Employee Health Claims

By Prescott Carlson in News on Apr 5, 2010 8:40PM

It's no secret that the State of Illinois is in some serious financial trouble and can't pay its bills. School districts are waiting on funds, social services are in peril, even the guy running the newsstand at the Capitol can't get paid. And now Chicagoist learns that the State's finances are so in the hole, it can't even keep up with the health and dental insurance claims of its tens of thousands of employees.

Similar to companies with massive workforces, the State of Illinois' Quality Care Health Plan (QCHP) and Quality Care Dental Plan (QCDP) are self-insured plans. The State funds the plans through nominal employee premiums deducted from paychecks, State revenue, and legislative appropriations. The amount of funding available depends solely on the amount of revenue coming in, and varies in any given month. With the lack of any surplus, the State has no ability to pay claims in a timely manner, and it "cannot estimate when a regular payment schedule will resume."

As of April 2, 2010, dental providers had only been paid for claims through December 11, 2009, while health care providers have it much worse -- QCHP-contracted providers have only been paid for claims through September 11 of last year, while non-QCHP-contracted providers have only been paid through August 14. Not only are payments severely late, but until the State can get caught up the hole just gets deeper and deeper -- any claims that take longer than 30 days to pay (which is currently all of them) incur a charge of 9% interest.

So what does this mean for State of Illinois employees? Possibly paying for services out of pocket or doing without. An inside source at a local private cancer hospital tells Chicagoist that their facility has been instructed to not schedule patients who have QCHP coverage, unless the patient can make payment upfront to be reimbursed by the State at a later date -- which in the case of cancer treatment, that's an expense very few will be able to float for seven months. If the State's financial ship is not righted soon, many more private practices and hospitals may be likely to follow suit.