Health insurance changes approved

ILLINOIS GOVERNMENT

SPRINGFIELD — A package of health insurance reform measures that Gov. J.B. Pritzker called for at the beginning of the legislative session will soon be headed to his desk for his signature.

The Illinois House gave final approval Saturday to a pair of bills that limit the ability of insurance companies to deny coverage or steer individuals toward lower cost, and sometimes less eff ective, treatments and medications, strategies sometimes referred to as "utilization management."

The package also includes measures giving the Illinois Department of Insurance authority to approve or deny premium rate changes in large-group health insurance plans while banning the sale of short-term, limited duration individual health plans, which are sometimes derisively referred to as "junk insurance."

In a statement issued moments after the House vote, Pritzker called it "a historic win."

"When I first proposed this legislation in my FY25 Budget Address, I said we would put power back into the hands of patients and their doctors and reform predatory insurance companies and their unfair practices," he said. "That's exactly what we did."

Pritzker first called for the changes in his State of the State address in February, saying they would "save lives and lower health care costs for millions of Illinoisans."

The biggest changes are included in House Bill 5395, dubbed the "Health Care Protection Act." Among other things, it requires insurance companies to use "generally accepted standards of care" when deciding whether to cover certain treatments or services.

It also bans the use of step therapy requirements in prescription drug plans that require a patient to show that a lower-cost alternative drug is ineffective before covering a more expensive drug recommended by their physician.

The bill also prohibits insurance plans from requiring prior authorization before covering in-patient psychiatric care. For other kinds of care, it requires insurers to post publicly on their website when prior authorization is required.

It also requires insurers to maintain accurate, up-to-date lists of providers who are included in their networks.

And it gives the Illinois Department of Insurance authority to approve or reject proposed premium rate changes in large-group health insurance plans, similar to the authority it already has over small-group plans.

Another provision which the Senate put into a separate bill, House Bill 2499, would prohibit the sale of one type of insurance known as "short-term, limited duration" health policies — sometimes derisively referred to as "junk insurance" — that do not have to meet minimum standards under the federal Affordable Care Act.

Those changes apply only to the types of insurance plans regulated by the state. Those include employer-based group plans that are fully funded by the insurance carrier as well as plans offered by local governments and plans provided under the state Medicaid program. They do not apply to plans regulated under the federal law known as ERISA — the Employee Retirement Income Security Act of 1974.

The package originally passed the House as a single bill in April with bipartisan support, 81-13. Pritzker spent the next several days touring the state to drum up public support, making appearances with doctors and patients at health care facilities in Belleville, Peoria, Rockford and other cities.

Meanwhile, talks continued behind the scenes between advocates for the changes and the Illinois Life & Health Insurance Council, the insurance industry's main lobby group. Over the next several weeks, those talks led to compromise language on the use of step therapy and prescription drug formularies, as well as Department of Insurance review of large-group rate changes.

"I appreciate having a seat at the table throughout this legislative process and thank the governor for hearing our concerns and engaging us as a partner," ILHIC president Laura Minzer said in a statement Saturday. "While we may not find agreement on every provision, being heard, and listened to, is integral to finding the best solutions for this meaningful legislation. It is with this spirit of cooperation that the council will continue working to make improvements during the legislation's implementation phase."

Talks in the Senate also led to the decision to separate the package into two bills, splitting off the more contentious proposal to ban the sale of short-term limited duration policies into separate legislation.

Those policies are typically sold to people who are temporarily unemployed or have some other circumstance in their life that causes them to need coverage for only a short period. But while they often cost less than traditional policies, many of them also have high deductibles and do not offer the same types of benefits that are mandated in other plans, such as coverage for emergency treatment, laboratory services or preexisting conditions.

"I have had people reach out to me who thought they had coverage when they had these shortterm limited duration plans, only to find out that they were not covered," Sen. Laura Fine, D-Glenview, said during Senate debate Thursday. "Their prescription drugs were not covered. Their emergency services were not covered. And it ended up costing them a whole lot more than it would have, had they had the insurance that they thought was possible and that they thought that they were paying for."

Republicans, however, argued that for many people, short-term limited duration plans are a more affordable alternative than continuing an employer-based policy through a COBRA plan or buying an individual plan on the Affordable Care Act exchange market. They argued consumers should be allowed to choose the option that is best for them.

Sen. Win Stoller, R-East Peoria, compared short-term policies to mobile homes, which may be built of inferior materials compared to a traditional home, but which are still suitable for some people.

"And I would never be so audacious to suggest that we should ban mobile homes. I think that's absurd," he said. "But that's exactly what we're doing here in relation to these short-term health plans, saying that we know better than you, we know what's best for you. We don't think you can make an informed decision."

The stand-alone bill, HB 2499, passed the Senate on a straight party-line vote, 40-19. The remainder of the package contained in HB 5395 passed with a handful of Republican votes, 45-14.

Likewise, the vote in the House to concur with the Senate changes to the ban on short-term limited duration policies fell along party lines, 72-35. The concurrence vote on the remainder of the package passed with a handful of Republican votes, 83-23.