In recent years, many Illinois consumers were socked with steep price increases when buying health insurance on the Obamacare exchange.
A bill that’s gaining traction in Springfield, however, could prevent that. The bill would give the Illinois Department of Insurance the power to say no to certain sky-high price increases proposed by insurance companies for plans sold to individuals and small businesses. The bill wouldn’t apply to plans offered by large employers.
It’s a change proponents say could help protect consumers, while opponents of the bill say it does nothing to address the rising prices of health care that can lead to higher insurance prices, and it could limit the types of plans insurers are able to offer.
The bill, introduced by Rep. Bob Morgan, D-Highwood, would allow the Department of Insurance to reject rate increase proposals, for individual and small group plans, that are “unreasonable,” meaning they’re excessive, unjustified or unfairly discriminatory, as defined by the federal government. Now, Illinois reviews rates and may try to negotiate with insurers to bring them down, but the state generally can’t reject or change rates that are actuarially sound.
The bill passed the House, 73-41, this month and is now awaiting hearing in the Senate. Many of the plans sold to individuals that would be impacted by the bill are sold on the Obamacare exchange.
The bill comes as Americans grow increasingly uneasy with the high costs of everything related to medical care, from hospital visits, to medications to health insurance. It also comes amid continued uncertainty around the future of the Affordable Care Act, also known as Obamacare, with some saying that unpredictability could mean higher prices for consumers next year.
Morgan said he decided to sponsor the bill this year because he was tired of seeing insurance companies announcing double-digit rate increases while also posting fat profits.
“The state was powerless to stop it and protect the consumer,” Morgan said. “You’re seeing 50 percent, 100 percent increases, and it’s just hammering these small business while the insurance carriers are doing just fine every year.” Before becoming a lawmaker, Morgan was general counsel in Gov. Pat Quinn’s office, overseeing healthcare legal issues including the implementation of the Affordable Care Act.
Rates for plans purchased on the exchange actually decreased slightly this year in Illinois, after years of often double-digit increases. In 2018, insurers increased rates on average by 16 to 37 percent for the lowest-priced plans on the exchange in Illinois, hitting some consumers hard (mainly those who didn’t get tax credits to offset the costs of their premiums).
The state’s largest insurer, Blue Cross and Blue Shield of Illinois, proposed average rate increases of 5 percent to 38 percent for its individual plans for 2018, citing, at the time, increasing medical and prescription drug costs as well as uncertainty over the future of parts of Obamacare, as reasons. In 2018, Blue Cross and Blue Shield of Illinois’ parent company, Health Care Service Corporation, posted a profit of $4.1 billion. A Blue Cross and Blue Shield of Illinois spokesman said earlier this year, after that profit was reported, that the insurer would continue its efforts to “stabilize or lower” costs of insurance plans for consumers next year.
Most people in Illinois get health insurance through employers or government programs such as Medicare and Medicaid. But this year, about 312,000 people in Illinois selected health plans through the Obamacare exchange.
Lawmakers have tried to pass similar bills for years without success, but Morgan thinks his bill might stand a better chance this year because Blue Cross and Blue Shield of Illinois is neutral on it, rather than opposing it, he said. A spokeswoman for Blue Cross declined to confirm the insurer’s stance on the bill, saying Blue Cross doesn’t comment on pending bills. A similar bill passed the House in 2017 but then didn’t make it out of the Senate, though the bill’s sponsors are hopeful that changes made to this year’s bill will help it succeed.
A number of other states already have the power to reject proposed rate increases. Prices for individual health plans in states that had that power – along with a requirement that insurers spend a certain percentage of their premiums on medical care – tended to be lower than prices in the states without that power between 2010 and 2013, according to a study published in the journal Health Affairs in 2015.
Not everyone, however, is on board with the proposed bill.
A spokeswoman for an insurance industry lobbying group, America’s Health Insurance Plans, noted in an email that the rising cost of doctor’s visits, hospital stays and medications all contribute to health insurance prices.
“This does nothing to address the underlying cost of care, and would impact the stability of the marketplace, hamstring insurance providers’ ability to offer innovative, quality, and affordable plans, and significantly increase out-of-pocket costs for patients,” said spokeswoman Cathryn Donaldson.
The Illinois Chamber of Commerce also opposes the measure.
“The Illinois Chamber believes the marketplace, rather than government interference, is the best way to provide high-quality and affordable healthcare options,” said chamber spokeswoman Whitney Barnes, in a statement.
Still, the bill’s supporters say they think it could make a difference for consumers in Illinois.
The bill is one more thing Illinois can do to try to hold down costs for consumers, which is a goal for advocacy groups such as the AIDS Foundation of Chicago, said Nadeen Israel, the organization’s director of policy.
“Now, the Department of Insurance can provide comment on it but can’t say this rate increase is excessive, go back to the drawing board,” Israel said. “When the Department of Insurance has this power of rate review, that can actually bring down the cost of premiums over time for consumers.
Twitter @lschencker
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via Breaking Business – Chicago Tribune http://bit.ly/1Gz2cjH
April 22, 2019 at 05:03AM
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