June 17, 2011 / 8:36 PM / in 7 years

Humana aims to keep Illinois workers on health plan

NEW YORK (Reuters) - A dispute between health insurer Humana Inc and the state of Illinois heated up on Friday, as the fate of thousands of state employees’ health coverage hung in the balance.

Earlier this year, Illinois chose new health plans for 200,000 public workers and retirees that do not include Humana and several other insurers, with an effective start date on July 1. Humana had covered about 15,000 workers.

Humana recently won a court injunction against the new plans to make a case for the contracts to be rebid. As the legal proceedings are worked out, Illinois has asked its prospective and current insurance providers, including Humana, to provide 90-day emergency contracts to make sure employees are covered. But even at that level, it seems Humana and the state cannot agree.

Humana said on Friday it was willing to extend coverage for another 90 days, but would not accept changes to its contract required by the state, arguing they would unnecessarily raise healthcare costs for plan members, their families and other Humana enrollees.

“Illinois state employees and retirees deserve affordable healthcare coverage options that preserve access to a broad range of healthcare providers, including their current doctors,” Humana said in a statement.

Company officials could not be reached for further comment.

Illinois has asked health insurers to drop exclusivity clauses in their contracts that prohibit some doctors from serving employees through another health plan, according to Mike Claffey, a spokesman for the Illinois Department of Healthcare and Family Services.

The state has set a deadline for Monday, June 20 for employees to select their new health plans.

Humana said it urged the state to extend its current coverage, without changes, “to allow members adequate time to make an informed choice about their future coverage.”

Company shares closed down 0.9 percent at $77.51 -- still relatively near their 52-week high of $80.81.

The Louisville, Kentucky-based company is known best as a provider of Medicare plans for the elderly. Its first-quarter profit jumped 22 percent, fueled by strong growth in its Medicare Advantage and Medicare prescription drug membership.

(Reporting by Ransdell Pierson; additional reporting by Karen Pierog in Chicago; editing by Lisa Von Ahn, Gerald E. McCormick and Andre Grenon)

This article has been modified to correct the headline to be clear the company aims to do this

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