State raises health insurance rates

The Illinois Department of Insurance finalized rates for 2026 health insurance premiums this month, exercising a new right to modify premium adjustments proposed by companies issuing small group or individual insurance plans through the Affordable Care Act.

Surprisingly, most premiums filed by insurers increased after the state's reviewal, including nearly all remaining Affordable Care Act marketplace rates in Sangamon County. Architects of the state law that created rate reviews, including state Sen. Laura Fine, said they hoped the law would lead to lower monthly premium costs. The law gives the Department of Insurance the authority to disapprove or modify proposed adjustments for upcoming "unreasonable rate increases or inadequate rates."

"It begins in 2026, when our marketplace is going to be run by the state, versus the federal government," Fine told The Evanston Roundtable last year. "By putting rate review in place, we're hoping that we're going to see a reduction in the price of premiums moving forward, when this is all implemented."

The Department of Insurance enlisted the consulting agency Risk & Regulatory Consulting, at the cost of $500,000, to review the rates, though the filings state "the ultimate decision regarding the reasonability of the filed rates is determined by the (Illinois Department of Insurance)."

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What is rate review and how does it work?

In 2023, the Illinois General Assembly passed a law allowing the state's Department of Insurance to modify or deny proposed premium rate increases from health insurers for small business and individual plans.

Pennsylvania, which only has about 300,000 more people than Illinois, used its rate review authority last year to decrease a large share of premium rates that insurers were seeking to charge recipients of various individual and small group plans.

The Pennsylvania Insurance Department had the authority to review rates for 30 individual and small group insurance plans, ultimately lowering 21 of them.

Insurers submit their proposed premium adjustments to the state health department – considering various demographic and geographic factors that play into setting health insurance rates – which then has the ability to review the companies' proposals before accepting, denying or modifying the monthly rate charged to its citizens.

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Understanding marketplace insurance and tax credits

The U.S. has long had the most expensive health care system in the world, which some argue is only getting more expensive due to the explosion of costly weight loss drugs.

For people under the age of 65, most rely on a job to provide health insurance from private insurers. For those with special circumstances or the inability to work, government-funded Medicaid becomes an option.

The marketplace established by the Affordable Care Act provides another avenue to health care for those who work jobs without the benefit of insurance but make too much money to qualify for Medicaid. Almost half a million Illinoisans enrolled in those types of plans last year, with more than 100,000 new beneficiaries.

The Affordable Care Act also created more provisions to push small businesses – defined as having fewer than 50 employees – to insure their workers.

However, tax credits that made these marketplace plans reasonably affordable, according to the Center on Budget and Policy Priorities, are set to expire at the end of the year. Almost 400,000 people on marketplace insurance in Illinois qualified for those credits, saving recipients an average of more than $500 per month, according to KFF.

The lack of tax credits means insurance enrollees may feel the brunt of premium rate hikes for the first time in years. The average premium that marketplace enrollees in Sangamon County were charged last year was near $850 per month before tax credits brought the average down below $200 per month.

The Department of Insurance, in its 2026 rate announcement, cited – and criticized – the federal budget as the main reason for rates dramatically increasing and said the expiration of those tax credits "is anticipated to result in a significant number of uninsured Americans."

Gov. JB Pritzker, along with 17 other Democrat governors, signed a letter to congressional leaders in both the House and Senate last week urging Congress to extend the tax credits.

"If they expire, premiums will rise by thousands of dollars for many families, millions will lose coverage, and people will be forced to make impossible choices between paying for health care, rent or groceries. Hard-working American families, older Americans not yet on Medicare, small business owners, and rural communities – where marketplace coverage is often the only option – will be hit the hardest," the letter states. "If Congress acts quickly, states can lock in lower premiums and spare families a wave of sticker shock this fall. If not, the damage will be felt for years."

Read the letter in full here:

Get Covered Illinois, the state's health insurance marketplace, has a frequently asked questions webpage about changes to finding insurance next year. Starting Oct. 1, Get Covered Illinois will have a customer assistance center to answer consumer questions.

Open enrollment begins Nov. 1 and ends Jan. 15, Illinois has a network of navigators that can provide free, in-person assistance any time of the year. Springfield has two such navigators: Springfield Urban League and Central Counties Health Centers. Visit getcovered.illinois.gov to schedule an appointment.

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