Pritzker signs bills altering Illinois health insurance market by establishing rate revision, a state market

Oh, I signed! says State Senator Laura Fine, D-Glenview, as she realizes that her bill giving the Department of Insurance new oversight authority was approved by Gov. JB Pritzker on June 27, 2023. (Andrew Adams/Capitol Illinois News)

SPRINGFIELD Gov. JB Pritzker signed into law legislation Tuesday that will dramatically change the health insurance market in Illinois.

The measures establish a statewide exchange for policies sold under the Affordable Care Act and give the Illinois Department of Insurance the authority to change or reject proposed rate hikes.

Since day one of my administration, I have been committed to making health care more equitable, holistic and accessible, Pritzker said at a bill signing ceremony in Chicago. With these bills, we’re not only increasing access to affordable preventive care, we’re improving the quality of life for the millions of people who call Illinois home.

Under the Affordable Care Act, people who are not eligible for Medicaid but do not have access to affordable health insurance through their employer can purchase subsidized policies through an online exchange operated by the federal or government state.

Illinois, however, was among the states that chose not to establish its own exchange. Instead, it pays an annual fee so Illinois residents can use the federal exchange.

That will change with House Bill 579, which calls on the Department of Insurance to establish a statewide exchange that will be fully operational by 2026.

Dana Popish Severinghaus, director of the Department of Insurance, said in an interview after the bill was signed that having a state exchange will eventually make it easier for Illinois consumers to purchase insurance.

I think ultimately our goal is that Illinois consumers can have a one stop shop where, whether they need to join an ACA plan or a Medicaid plan or, you know, their family is split, we can do it in one place. for them to make it as easy as possible, he said.

Pritzker said Tuesday that having an exchange based in the state will give Illinois the flexibility to offer more enrollment periods throughout the year than federal exchange offers and to coordinate with non-profit organizations that help people navigate the market.

But perhaps more importantly, Pritzker said, it will protect Illinois consumers from any potential changes in federal policy. During the Trump administration, funding for advertising and non-profit groups to help people sign up for insurance was cut, and the annual number of signup days was cut in half.

I’m suggesting that if Joe Biden were to lose reelection to a Republican, people nationwide would lose health care coverage or lose access to that federal exchange, but they won’t lose access to the Illinois exchange, Pritzker said .

Pritzker also signed House Bill 2296, which, for the first time, gives Illinois insurance regulators the authority to review health insurance rate changes and, if necessary, change or deny the authority to change proposal that regulators in 41 other states already have.

Under the bill, starting in 2025, companies offering individual and small group health insurance policies will have to submit proposed rates for the following year to the Department of Insurance, which will post those initiatives on its website. After a 30-day public comment period, the department will approve, amend, or reject the proposed rate changes.

The bill also calls on the department to publish an annual report on health insurance coverage, affordability, and cost trends in Illinois, including things like cost trends for major categories of services, including prescription drugs; usage patterns by main service category; the impact of changes in benefits; enrollment trends; and demographic changes.

State Senator Laura Fine, D-Glenview, said in a separate interview before the bill was signed that these changes will make health insurance pricing more transparent for consumers and give regulators the ability to determine if consumers are overloaded.

The insurance industry files its plans with the Department of Insurance, and while the department goes through the actuarial process, it can’t reject a rate, he said.

Under the new law, he said, regulators will be able to refuse unreasonably high rates and rates so low that they put the insurer at financial risk.

Capitol News Illinois is a non-profit, non-partisan news service covering the state government. It is distributed to hundreds of print and broadcast outlets across the state. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and the Southern Illinois Editorial Association.