IL holds off paying providers for retiree healthcare

The state of Illinois has been months late in paying providers who treat retired public educators, often causing creditors to threaten elderly patients for the money owed, the Rockford Register-Star reported.

The pay shortfalls affect those providing care to about 128,000 retired state university employees over the age of 65 and began occurring in 2010. Illinois self-funds the insurance plan covering that group of employees and has opted to pay providers until cash runs out, then resume payments with the next fiscal year. In some instances, providers waited more than eight months for payment. 

"At this time funds remain insufficient to pay claims on a normal schedule, and we cannot estimate when a regular payment schedule will resume," said a statement from the Illinois Central Management Services Department issued to the newspaper.

The state of affairs has prompted some providers to lean on the patients to receive the money before the state ponies up.

"Creditors come to them and threaten to garnish wages from their spouses if their spouses are working," Linda Brookhart, executive director of the State Universities Annuitants Association, told the Rockford Register-Star. "They threaten to put liens against their houses. In some cases the retirees must start making payments to those doctors, hospitals and clinics until the state decides to pay." 

Retired government workers are having hardships with their coverage in other jurisdictions as well. The city of Detroit has decided to eliminate such coverage entirely and provide a $125 a month payment for employees to buy insurance on Michigan's health insurance exchange, the Detroit News reported. It is unknown whether that will cause uninsured rates to soar and burden the region's hospitals. And sequestration-related cuts to the Defense Health Program have left healthcare providers in the Tricare program in limbo.

To learn more:
- read the Rockford Register article
- here's the Detroit News article