New measures give Illinois more control over the Obamacare trade

Illinois will soon run its own Affordable Care Act health insurance market and have the power to stop skyrocketing price hikes on plans sold on it.

Gov. JB Pritzker signed a pair of bills on Tuesday aimed at giving Illinois more control over health insurance prices and the Affordable Care Act market, also known as the Obamacare exchange, where people can buy insurance plans individual and family health.

The signing of the bill on Tuesday came amid criticism leveled at Pritzker for its decision to end enrollment for many people in a separate health program for immigrants in the country without legal permission.

One of the bills signed on Tuesday will allow Illinois to operate the exchange where health insurance plans are sold, by 2025. Now, consumers must go to the federally operated healthcare.gov to buy exchange plans.

Pritzker called the new law a monumental achievement in a press conference Tuesday and said it would protect Illinoisns from any future changes in federal policy that seek to undermine access to affordable health care.

The idea behind that law is to allow Illinois to better reach consumers and protect the exchange from policy changes at the federal level. Former President Donald Trump made it clear during his tenure that he was not a fan of the Affordable Care Act and cut much of the funding for outreach and workers who assist consumers with purchase plans.

You’re less subject to changing political winds, so if there’s a change in administration at the federal level, you’re a little more isolated, said Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms.

Governor JB Pritzker speaks during a news conference at Chicago Union Station on June 26, 2023.

By running its own exchange, Illinois could also give consumers more options to buy health insurance. Now, consumers can typically only sign up for exchange plans during an open enrollment period that runs from November 1 to mid-January or if they experience certain life changes, such as having a child or losing their job.

When Illinois runs its own exchange, it could open additional enrollment periods if needed, such as if a disaster strikes that creates a need for health insurance or if a large employer leaves an area of ​​the state, he said Theresa Eagleson, Illinois department director. health and family services.

Illinois will also be able to better understand which areas of the state may need more awareness or education about the exchange, based on application data, Eagleson said.

Illinois will join 18 other states in operating their own Affordable Care Act exchanges, Corlette said. Health insurance companies will pay assessments to the state, rather than the federal government, to help manage the state exchange. The state budget for the next fiscal year also includes $10 million to help get the exchange off the ground.

The second new law will give Illinois regulators the power to reject or change proposed price increases for individual and small business health insurance plans, such as those sold on an exchange, starting with plans for 2026. The law won’t apply to health insurance plans offered by large employers because those plans are regulated by the federal government.

Having the ability to go back to insurance companies now and say, “This isn’t working, it’s a really important tool in our toolbox to be able to protect consumers,” said Dana Popish Severinghaus, director of the Department of Insurance at the Illinois.

Each year, insurance companies that sell exchange plans must make certain proposed rate increases public online before actually raising their prices. So far, the Illinois Department of Insurance has reviewed the rates and may try asking insurers to lower them if they are too high. But the department couldn’t actually say no to price hikes.

In some years, Illinois consumers have faced double-digit price hikes in exchange plan monthly premiums.

On average, prices for low-cost silver-level plans on the exchange have risen 11 percent statewide this year, according to an analysis by the Illinois Department of Insurance.

We know that the prices and costs of health care are rising, and this is one way the state regulatory agency can reduce costs for consumers and try to make them more affordable, said Stephani Becker, associate director of health justice at the Shriver Center on Poverty Law in Chicago.

The new law could also help keep small business insurance prices low, Elliot Richardson, president and co-founder of the Small Business Advocacy Council, said at the press conference.

It’s a gut punch for small businesses when health insurance prices rise every year, he said. This bill offers hope that premiums for small businesses will stabilize and eventually fall, Richardson said.

The bill, however, has had a handful of critics, including from the National Association of Mutual Insurance Companies.

For decades, Illinois (has) had an open market in which consumers benefit from competition from insurers, said Andrew Perkins, regional vice president for the Great Lakes region for the National Association of Mutual Insurance Companies, in a statement. . While this bill does not directly impact property and casualty insurance, we disagree with the notion that regulation is a better way to set product prices than the competitive marketplace.

Under the new law, Illinois regulators will be able to reject or change a proposed rate if they deem it excessive, unjustified, or unfairly discriminatory. They can also refuse rates that are too low which endanger the solvency of an insurer. In 2016, the Illinois Land of Lincoln insurance company went bankrupt, leaving nearly 50,000 Illinois residents struggling to find new insurance in the middle of the year. Land of Lincoln said it set its prices lower than it otherwise would have in anticipation of getting certain payments from the federal government that never quite materialized.

Under the new law, Illinois will join 41 other states that also have the final say on proposed tariffs, according to Governor JB Pritzkers’ office.

In those states, there is evidence that final prices tend to be lower than proposed prices, on average, Corlette said. It’s relatively rare for a state to outright reject a proposed rate, she said. It’s more common for states to have a back-and-forth with insurers when they think rates are too high, she said.

It’s more of a negotiation and they ultimately set a rate that is acceptable to both parties, Corlette said.

Insurance companies typically don’t pull their products from a state exchange for such negotiations, he said, although it may not be public knowledge when a deal can’t be reached. In Illinois, insurance companies whose rates have been changed or declined will have 10 days to request a hearing if they disagree.

Pritzker celebrated the signing of the bill on Tuesday, even as it defended itself against criticism from Latino elected officials over changes to a health insurance program for immigrants into the country without legal permission. As part of a last-minute budget deal, that program is receiving only about half the money it needs for the fiscal year that begins July 1. As a result, Pritzker has decided to close enrollment in the program on July 1 for people under 65 who are currently eligible and limit enrollment for people 65 and older. Pritzker said the changes were necessary to save the program.

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