State pauses its premium payments to Health Alliance

URBANA – The state of Illinois' financial condition has become so bad that officials have told Urbana-based Health Alliance Medical Plans that the company won't receive any more premium payments from the state until Dec. 10.

Health Alliance insures 78,600 active state employees and employee dependents, and was last paid by the state Aug. 26 for the July premium. The state's average monthly premium payment to Health Alliance is $33 million, spokeswoman Jane Hayes said.

"Essentially, by Dec. 10, they'll be three-and-a-half months behind in premiums," she said.

State Rep. Bill Black, R-Danville, said he was told the severely delayed payments "go pretty much across the board with any insurance company that does business with Illinois, to cover either employees or retirees" the state covers.

"I'm telling you, nothing surprises me anymore," Black said. "I don't want to be Chicken Little or anything, but if we were a private business, I don't think we'd have any choice but to ask for protection from our creditors."

State Sen. Mike Frerichs, D-Urbana, said he too is becoming numb to the bad financial news.

"It's getting worse," he said. "You see it every month. Our revenue is down and below what was projected. It was already a budget held together with borrowing from our vendors.

"This really shouldn't be a surprise, but it is disturbing that Illinois is becoming such a deadbeat."

A spokeswoman for state Comptroller Dan Hynes said there are no payments to Health Alliance pending in the comptroller's office, meaning the delay has to be at the Department of Healthcare and Family Services.

Spokeswoman Carol Knowles said there is $42 million in the health insurance reserve fund from which insurers like Health Alliance and CIGNA Health Insurance are paid, "but $42 million doesn't go very far, because we probably spend $100 million a month from that fund."

"This is unusual," Hayes said. "Through the last fiscal year, that state was timely on its payments."

She said Health Alliance members should not be concerned.

"We're continuing to pay claims," she said. "The providers won't be asking our patients for money upfront."

Calls to the governor's office and the Department of Healthcare and Family Services were not returned.

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