Four-year costs much higher than earlier estimates
Illinois Democrats want answers from Gov. Bruce Rauner’s administration about why the 4-year cost of managed-care contracts for the Medicaid program jumped by more than $20 billion from earlier estimates.
However, the Department of Healthcare and Family Services defended the contracts, saying that while the overall cost is higher, more Medicaid recipients will be under managed care, which will save money in the long run.
Both the House and Senate have scheduled hearings over the next few weeks to get at why the final contracts cost so much more than previous estimates and how state officials handled the selection process.
“At lot of the hearing is just to clarify what is the real cost of the program,” said state Rep. Greg Harris, D-Chicago, chairman of the House Human Services Appropriations Committee. “Whatever the cost is, it’s going to be the largest procurement in (state) history. None of this was done with independent oversight. Nobody knows how the contracts were awarded.”
The state has spent months in the process of selecting health plans that will provide managed-care coverage for about 80 percent of Medicaid recipients. DHFS said about 2.7 million people will be covered. Illinois has had managed care for Medicaid recipients since 2014 and about 63 percent are now enrolled.
DHFS officials testified at hearings last spring that the estimated cost of the managed-care contracts would be $9 billion to $10 billion a year. The contracts would be awarded for a 4-year period.
“A $30 billion to
$40 billion price range was always talked about,” Harris said.
However, just before the Thanksgiving holiday, DHFS posted information on the state’s procurement website showing the 4-year cost of the contracts to be
Seven vendors were selected for the program: Blue Cross Blue Shield of Illinois, Harmony Health Plan, IlliniCare Health Plan, Meridian Health and Molina Healthcare. Those plans will be available in all 102 counties in the state. Two other plans – CountyCare and NextLevel – will be available only in Cook County, DHFS said.
DHFS spokesman John Hoffman said the state is currently spending about $10.5 billion on Medicaid managed care and that cost will go to $15 billion when the new HealthChoice Illinois starts Jan. 1. He said that despite adding “hundreds of thousands of new members,” the program will save the state $200 million to $300 million a year over 4 years.
Hoffman said the department “followed a competitive and transparent” process to select vendors for the program.
Democrats didn’t agree. Harris pushed legislation during the session that would have forced DHFS to start the purchasing process all over again. The bill passed, but Rauner vetoed it. The General Assembly did not vote to override the veto.
Harris also said legislators want more information about how the state plans to get nearly 3 million Medicaid recipients into managed-care programs that are supposed to start Jan. 1.
“There are a lot of questions about how this will be implemented,” he said.