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Pritzker’s health insurance overhauls cross finish line

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(The Center Square) – Two bills that will drastically change health insurance plans regulated by state government cleared the Illinois General Assembly Saturday.

Democrats and Gov. J.B. Pritzker have been pushing for the elimination of what they call “deceptive” short‐​term limited duration insurance plans. House Bill 2499, dubbed the Health Care Protection Act, eliminates those plans.

The measure passed both the House and Senate and heads to the governor’s desk for his expected signature.

“This legislation will protect patients through an array of targeted reforms: banning step therapy, banning prior authorization for crisis mental healthcare, banning junk insurance plans, and ending unchecked rate increases for large group insurance companies,” Pritzker said in a news release Saturday. “We’re saving lives and making the path to care easier for all.”

In committee, state Sen. Chapin Rose, R-Mahomet, questioned Ann Gillespie, acting director of the Illinois Department of Insurance, about the so-called deceptive plans.

“If it’s actually deceptive then they should be dealt with under the Deceptive Practices Act, which already exists,” Rose said.

“To your point, we believe them to be deceptive and this is the approach we’re taking rather than doing it on a case by case basis,” Gillespie said.

Gillespie said the IDOI can only do so much when the business model STLDs use is legal.

“The business model by its very nature is deceptive. As long as it’s legal there’s very little the department can do and that’s why we’re offering this approach,” Gillespie said.

State Sen. Dave Syverson, R-Cherry Valley, said the department approves the brochures insurance companies give to consumers and asked why the department couldn’t just regulate the STDL plans that way. Gillespie said there’s only so much they can do if the business model is legal.

The department testified at the hearing that Affordable Care Act marketplace plans are eligible for federal subsidies to bring down the cost to the consumer.

“ACA plans can be cheaper than STLDs and sometimes as low as one dollar per month,” said Joanna Coll, IDOI counsel.

Syverson said his constituents who are enrolled in ACA plans tell him that they may pay a dollar per month for the ACA plans but at the end of the year, if their income is higher than at the time they enrolled they’ll have to pay thousands of dollars come tax time.

Coll said there’s a limit on how much can be charged back for everyone under 400% of the federal poverty level.

“Anybody who would be having their tax amount adjusted at the end of the year upon having insurance … through an employer after a brief period of having an ACA plan, they would be the only ones really having a larger financial impact,” said Coll.

Syverson said if the STLD plans are eliminated then people are left with COBRA plans, which is about $3,000 a month for the average family, or they can get a small-network, high deductible, high co-pay ACA plan that will lower their costs for a couple months but at the end of the year they’ll have to pay the government all that money back.

“We’re limiting people to have very few choices,” said Syverson.

Echoing Syverson on the House floor Saturday, state Rep. Jeff Keicher, R-Sycamore, said short term plans should be an integral choice for those in the marketplace.

“When it is most needed, this is the most affordable platform that’s out there,” said Keicher.

State Rep. Bob Morgan, D-Deerfield, sponsored the bill in the House and said it will help consumers who have been scammed by predatory plans.

Also headed to the governor’s desk is House Bill 5395, another Pritzker initiative that cleared both chambers Saturday. Gillespie fielded questions from lawmakers in a Senate committee hearing about the bill earlier in the week.

“An individual’s physician makes the recommendation [of treatment] and as long as that’s compliant with generally accepted medical standards the insurance company has to cover it,” said Gillespie.

Republicans were concerned getting rid of step therapy was going to increase costs of insurance premiums for consumers.

“When we’ve passed these mandates, they apply to the state employees’ health care plan and we’ve said there’s not much cost. Obviously this year when COGFA did their report, we saw the state’s insurance plan go up $463 million. Now this doesn’t affect state employees because they’re under contract. But small employers [their employees] are having to pay $3,000 a month. Affordability is becoming a huge problem,” said Syverson.

The bill also seeks to give authority to the IDOI to get insurance companies, who’s rates the IDOI doesn’t agree with, to stop selling insurance at that rate.

“At this time the department can look at it [the rate calculation] and say, ‘Hey that’s not actuarially sound.’ Then the company has to put it on their website [that the IDOI found it not actuarially sound],” said an IDOI official.

The company only has to publish the IDOI findings that the rate is unsound if the company refuses to change it to a recommended rate.

Syverson discovered that the department has found only one case where an insurance company set a rate that wasn’t considered actuarially sound and refused to change the rate to IDOI’s recommended rate.

After the bill’s passage Saturday, the Illinois Life & Health Insurance Council applauded what they said was progress, but raised concerns.

“We hope to make more progress during the implementation phase,” said Laura Minzer, president of the ILHIC. “What the ongoing discussions in the House and Senate have amplified is the indispensable role insurance companies play in the affordability of health care. It is not an exaggeration to say that insurance companies make health care possible.”

ILHIC said they caution that banning the use of step therapy and restricting the use of prior authorization limits tools insurance companies have to control costs.

“These changes could lead to an increase in health insurance premiums as the cost of medical care continues to outpace cost increases for other goods and services,” the group said.

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