Two health insurers leave Illinois market

Only two health insurance companies are slated to offer marketplace health plans in central Illinois next year, halving the amount of insurance issuers the region currently has as Aetna and Health Alliance announced they will be exiting the insurance marketplace in 2026. In addition, health policy nonprofit KFF estimates the average cost of monthly premiums for central Illinoisans will increase by at least 65% as a result of federal tax credits expiring. All the while, Blue Cross Blue Shield of Illinois – the only company that covers the entire state – is proposing to raise rates at the highest clip of any health insurer in Illinois. Health Alliance, which is based in Urbana and issues the second-largest share of all health insurance plans in Springfield, stated it would be discontinuing group health insurance plans next year as it "struggled to achieve operational and financial efficiency" amid rising costs of health care, marking the end of an Illinois insurer that has been in business for nearly 35 years. Aetna already exited the marketplace once before in 2017, a few years before CVS Health's $69 billion purchase of the insurer was finalized. The American Medical Association continuously protested the merger, alleging it would violate federal antitrust law and "likely harm patients." The National Association of Benefits and Insurance Professionals, or NABIP, noted in a May press release this is now "the second time in a decade" Aetna has exited the insurance marketplace "and will leave nearly 1 million enrollees seeking new health insurance options" across the country. Although NABIP acknowledged the decision was a part of "broader market headwinds," the trade organization "warns of the cascading impact this move could have on health care access." Tax credits introduced with the Affordable Care Act, which were then expanded and extended by the Biden administration in 2021, are set to expire at the end of 2025. Such credits have been recognized as making marketplace health insurance reasonably affordable for more than 90% of recipients, according to the Center on Budget and Policy Priorities. Cuts to Medicaid could result in fewer options for care – regardless of a patient's insurance status – as health care providers that rely on Medicaid reimbursement could cut staff, decrease service hours or even close clinics. Brokers from the Illinois chapter of the National Association of Benefits and Insurance Professionals, or NABIP-IL, told Illinois Times that almost 100,000 people would be affected by Aetna's and Health Alliance's exit. They also warned of how people on marketplace insurance plans should expect to pay substantially more for health care next year. "Everybody is going to see a decrease in their tax credits, drastically," said Melissa Shepherd, a licensed broker who was recently appointed to an advisory committee for the upcoming state-based marketplace. "Compound that with the fact that carriers are asking for large (rate) increases this year." The lack of tax credits means insurance enrollees may feel the brunt of rate hikes for the first time in years. Last year, the average monthly premium that marketplace enrollees in Sangamon County were charged was near $850 before tax credits brought the average down below $200. Health insurance companies filed their initial rates for 2026 with the Department of Insurance last month; half of all submitted insurance plans increase the average premium rate by double digits, including a nearly 30% average increase for Blue Cross plans. Blue Cross also submitted the highest rate increases for next year's individual and small group plans, though all companies proposed decreasing rates for their lowest-level plans on the individual marketplace. Rates are finalized after the Department of Insurance reviews filings submitted by insurers. Keeping in line with the national average, about 90% of central Illinoisans on marketplace insurance plans have government subsidies to help them out, according to KFF, the nonprofit formerly known as Kaiser Family Foundation. Shepherd said the tax credits are likely expiring due to "bad actor" insurance agents who, with access to enrollee personal information, switched people over into zero-premium plans, even if they shouldn't have qualified based on their income level. Sherri Stewart, a licensed broker at American Central Insurance in Springfield, said Illinois had few zero-premium plans due to state mandates requiring more coverage from health insurers. "That was an unintended consequence of the tax credits being expanded," Stewart said. "It did happen in other states; it was very rampant." The Centers for Medicare and Medicaid Services finalized rules last month that aimed to limit federal spending and increase a variety of eligibility checks. Sara Walker-Hite, a licensed broker and president of NABIP-IL, said while it was not something that happened in Illinois, "we all certainly pay the price." Aetna and Health Alliance's exit may open the market for Blue Cross Blue Shield's Health Care Service Corporation, which already issues more than half of all health insurance plans in Springfield, according to the American Medical Association, and insures more than 500,000 Illinoisans. Blue Cross and Springfield Clinic, a provider that claims to serve almost one million patients across nearly 100 locations in central Illinois, had a public standoff during contract negotiations in 2021 that resulted in the insurer removing Springfield Clinic from in-network coverage for almost two years. The two companies eventually struck a five-year deal that categorized Springfield Clinic as an in-network provider through 2028. This spring, Springfield Clinic laid off almost 70 employees while citing nationwide economic concerns and "insurance reimbursement constraints," according to an internal memo obtained by IT. Get Covered Illinois, the state's health insurance marketplace, has a frequently asked questions webpage about changes to next year's marketplace. In addition to the department sending out more information in October, Get Covered Illinois plans to have call center representatives available "to help people choose a comparable plan." Although open enrollment doesn't begin until November, 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. Editor's note: A previous version of this story incorrectly referred to Blue Cross Blue Shield of Illinois as a for-profit company when it is a licensed nonprofit, though state Rep. Sue Scherer floated the idea of removing its tax-exempt status in 2022.