Illinois & Iowa | Spring | 2010 | Health Plan Analysis

A decision by Gov. Pat Quinn to bid out two contracts to serve the aged, blind and disabled population in Illinois' Medicaid program represents a return to the HMO model in a state that had essentially abandoned the HMO in recent years. The contract is only for 40,000 beneficiaries, but spending last year for this group reached $700 million. The success of this program would auger a larger role for HMOs as more RFPs are issued. Several companies are expected to bid for the contract, which has been amended to include prescription drug coverage. Elsewhere in the state, Illinois and Iowa plan to run their own high-risk pools that are slated to launch July 1. Under the health reform law, these two states are expected to receive $66 million to treat these beneficiaries. Illinois' previous experience with its own high-risk pool shows this group to be very expensive with an average per member per month cost of around $850 with 27 percent of that money going toward drug use.