New law bans practices aimed at lowering insurance payouts

Gov. JB Pritzker signed legislation Wednesday that puts new controls on the state's health insurance industry, including bans on certain practices companies have used to reduce costs by controlling the amount of health care services a patient receives.

The Health Care Protection Act, House Bill 5395, was among Pritzker's top legislative priorities during the just-completed legislative session.

Pritzker also signed House Bill 2499, which bans the sale of short-term, limited-duration insurance plans in Illinois – policies Pritzker and other critics refer to as "junk insurance" because they are not required to meet the minimum standards under the federal Affordable Care Act.

"For too long, insurance companies have used predatory tactics to make an extra dime at the expense of Illinois consumers," Pritzker said at a bill signing ceremony in Chicago. "For too long, patients have delayed or been denied medically necessary treatments because of profit-driver utilization management practices. For too long, shoddy networks, price gouging and overly complicated bureaucracies have stood in the way of our families getting the care that they deserve. Today, with my signature, Illinois is addressing and rectifying that problem."

Among other things, the Health Care Protection Act bars the use of a restriction known as "step therapy," also known as a "fail first" provision, that requires a patient to try and fail on one or more treatments preferred by the insurance company before they can access a treatment recommended by their doctor.

It also prohibits insurers from requiring prior authorization before a patient can receive emergency inpatient treatment at a psychiatric facility.

"Illinois, by the way, is once again a pioneer, the first state in the nation to do this for adults and children," Pritzker said.

The new law also requires insurers to maintain accurate, up-to-date lists of providers 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.

Pritzker first announced the plan in his State of the State address in February, saying he expected stiff resistance from the insurance industry but vowing "to spend serious political capital" if necessary to pass the legislation.

The bill was, in fact, the subject of intense behind-the-scenes negotiations between the administration, insurance industry representatives, health care providers and other stakeholder groups. In the end, the final version of the act had little opposition and drew some Republican support. It passed 45-14 in the Senate and 83-23 in the House.

Part of the reason for the bipartisan support was that the more controversial provision banning the sale of short-term, limited-duration insurance plans was taken out and put into a separate bill.

Those policies are marketed as temporary plans intended mainly for people who find themselves in between coverage plans, often because of changes in employment. Supporters of the bill argued those plans provide substandard coverage and often leave individuals liable for huge medical bills. But many Republicans argued that those policies provide a lower-cost option that suits the needs of some individuals.

That measure passed largely along party lines: 40-19 in the Senate, and 72-35 in the House.

Pritzker signed the two bills at a ceremony at Rush University Medical Center in Chicago where he was joined by lawmakers who supported the bill, as well as health care providers.

"The health insurance reforms passed by the Illinois lawmakers, many of them are right here, will ensure that administrative delays caused by the insurance companies as well as their inadequate provider networks, so called ghost networks, should be a thing of the past," said Piyush Vyas, president of the Illinois State Medical Society.

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