SPRINGFIELD – In response to decreased use of health care services through Medicaid managed care organizations throughout the COVID-19 pandemic, state Senate Assistant Majority Leader Dave Koehler, D-Peoria, and state House Assistant Majority Leader Fred Crespo, D-Hoffman Estates, filed legislation today to require companies to return excess profits and reallocate funding to critical health care services. 

“While insurance companies and managed care organizations see record-setting profits at the height of a global pandemic, rural communities across the state are experiencing unsustainable strain in their health care systems due to lack of resources,” Koehler said. “The money recouped through this legislation would provide immediate relief for Downstate hospitals that have been devastated by COVID-19.” 

Hospitals across the state are facing an unprecedented decline in outpatient procedures and elective surgeries as a result of the pandemic, contributing to severe financial strain on health care facilities that serve Illinois’ most vulnerable populations. Conversely, MCOs in Illinois have benefitted from these declines, as enrollment-based payments have continued despite decreased use of non-emergency health care services.

In response, Koehler and Crespo introduced Senate Bill 4207 House Bill 5867, respectively, which seeks to reallocatea portion of enrollment-based payments made to Medicaid MCOs throughout the pandemic. From an estimated monthly payment of $1.7 billion, a 20% return would yield $340 million per month that can provide needed relief to hospitals and other health care facilities that have been hit hardest by the COVID-19 crisis. In addition, recouping these funds can provide relief to health care service providers that may be impacted by state budget deficits. 

“While safety net and critical care providers are struggling to remain open and serve their communities, MCO’s are continuing to receive over a billion dollars in state and federal funding each month,” said Crespo. “Residents across Illinois are making significant sacrifices in order to protect themselves and their communities, and we’ve even seen the auto insurance and cable television industries return unused money to consumers. It is unacceptable that MCO’s are profiting off of taxpayer dollars that aren’t being used. Clawing back some of the funding that MCO’s have received throughout the pandemic and reallocating those dollars to health care providers in low-income and rural communities could help hospitals remain open amid ongoing financial instability that has been exacerbated by the pandemic.”

“Minority communities have been disproportionately affected by the pandemic and its devastating impact on their health and economic wellbeing,” said Jose Sanchez, President and CEO of Norwegian American Hospital in Chicago. “It’s only fair that the Medicaid managed care organizations provide desperately needed relief to our communities by sharing part of the record profits they have made during the COVID-19 pandemic.” 

For more information on Senate Bill 4207, please visit contact Senator Koehler’s office via email or by calling (309) 677-0120.