07 Jul Illinois Financial Woes Not Entirely Resolved with Budget
speroMD is located in Illinois, and therefore many of our readers live and work in Illinois. Whether or not you are in Illinois, the state made national news this week due to extreme budget difficulties that led Moody’s to threaten a “junk” status credit rating for the state. S&P Global Ratings have their eyes on state lawmakers, and failure to pass a budget for the third year in a row would not have boded well for the state credit rating.
Illinois has now passed a budget, but the state is still not in the clear. Some of the damage has already been done to businesses operating in Illinois as a result of Springfield’s failure to pass a budget for the past three years. One potential casualty was announced this week when Aetna provided notice that they plan to terminate their Medicaid contract for their Aetna Better Health product. Aetna is currently owed at least $698 million by the state of Illinois. Aetna has suggested that this is not a final decision, and they are hopeful that both parties will come to resolution. Aetna estimates that by the end of 2017, Illinois will owe the insurer $1.3 billion, not including interest payments that will be due on late payments.
Meridian Health Plan has also threatened to leave the state for similar reasons; they are owed $591 million by the state of Illinois.
Governor Rauner previously announced an initiative to reduce the number of managed care Medicaid providers in the state, however Aetna and Meridian are both in the running to remain in the state’s managed Medicaid program. Losing these insurers would create significant waves, contributing to the state’s budget-related instability.