Illinois Insurer of ‘Last Resort’ Faces Budget Crunch

An increase in enrollees and medical claims has forced Illinois' Comprehensive Health Insurance Plan, which operates as an insurer of "last resort" for individuals with catastrophic illness, to close enrollment and ask the state Legislature for additional funds, the Peoria Journal Star reports. The Legislature approved "CHIP" -- not to be confused with the joint state-federal Children's Health Insurance Program -- in 1986 and began funding the plan in 1989. CHIP provides individuals whose catastrophic illnesses "make them uninsurable by private providers" with "dramatically reduced premiums" and coverage until their lifetime bills exceed $1 million. Lauded "nationwide as a model for other states," the program has "succeeded in keeping its costs under control, covering more than 5,000 enrollees with an appropriation of just above $17 million annually." However, the Journal Star reports that the "last six months proved devastating for the program," with a 10% increase in health care costs and an increase in the number of patient claims resulting in "major unexpected deficits." The program expects its costs this fiscal year to be more than $34 million, or double its budget. As a result, CHIP is not accepting new applicants until more funding is allotted, and 350 "potential enrollees" are now on a waiting list. Officials expect that list to grow by 175 per month, the Journal Star reports. To address the anticipated budget shortfall, CHIP officials are asking the Legislature for $17 million more before the fiscal year ends June 30 and estimate they will need $41 million for the next fiscal year. Lawmakers also are investigating the problem and have proposed capping the lifetime coverage at $500,000 or increasing premiums (Keith, Peoria Journal Star, 11/20).