Aetna Threatens To Pull Out Of Illinois Medicaid Market

July 07--A major insurer is threatening to leave the state's Medicaid managed care program if Illinois can't figure out how to pay it -- a move that could force 235,000 Illinois residents to get new coverage.

Aetna Better Health of Illinois President Laurie Brubaker said in a court filing last week that the state owes the insurer $698 million.

Brubaker wrote at the time that if the state did not pass a budget by July 1 to stabilize the program and pay Aetna that money "Aetna Better Health may be left with no choice" but to file a notice of its intent to terminate its contracts with the state on or before Dec. 31.

Aetna spokeswoman T.J. Crawford confirmed in an email Thursday that the insurer has filed that notice. She noted, however, that the company still hopes it ultimately won't have to pull out of the program. State lawmakers passed a budget late Thursday afternoon. Afterward, Crawford declined to comment on whether Aetna would reconsider its position.

Brubaker wrote in the court filing that the insurer hoped that terminations wouldn't be necessary in the end, either because the state would pass a budget that addressed the issue or because the state would be able to comply with a recent court order.

Late last month, a federal judge ordered the state to start paying $293 million toward Medicaid bills each month in addition to another $1 billion over the next year. The judge's ruling came after lawyers representing Medicaid patients and attorneys for the state couldn't agree on how to start paying $3 billion owed to health care providers.

Aetna Better Health manages care for 235,000 Medicaid beneficiaries in Illinois as part of the state's Medicaid managed care program in which private insurers administer benefits of Medicaid -- a state- and federally funded health insurance program for the poor.

The state is in the midst of an overhaul of its Medicaid managed care program, after Gov. Bruce Rauner announced in February he wanted to narrow the number of private insurers that participate in hopes of streamlining the program and improving health care. Eight of the current 12 participating insurers responded to a request for proposals to participate in the reimagined program. The state has not yet announced which insurers will get to participate.

Aetna Better Health was one of the insurers that submitted a proposal, and Brubaker said that the insurer has not withdrawn that proposal.

Nevertheless, she wrote, Aetna Better Health "must safeguard its interests and position itself to mitigate the mounting financial risk."

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