Pritzker signs bills altering Illinois’ health insurance market; legislation authorizes state-based marketplace, rate review


"Oh, I’m signed!” exclaims Sen. Laura Fine, D-Glenview, as she realizes that her bill giving the Department of Insurance new oversight authority had been approved by Gov. JB Pritzker. | Capitol News Illinois photo by Andrew Adams

SPRINGFIELD – Gov. JB Pritzker signed legislation Tuesday that will dramatically alter the health insurance market in Illinois.

The measures establish a state-based exchange for policies sold under the Affordable Care Act and give the Illinois Department of Insurance the authority to modify or reject proposed rate increases.

“Since day one of my administration, I’ve been committed to making health care more equitable and holistic and accessible,” Pritzker said at a bill signing ceremony in Chicago. “With these bills, we aren’t just increasing access to affordable preventative care, we’re improving the quality of life for millions who call Illinois home.”

Under the Affordable Care Act, people who are not eligible for Medicaid but who do not have access to affordable health insurance through their employer can buy subsidized policies through an online exchange operated by either the federal government or their state government.

Illinois, however, was among the states that chose not to set up its own exchange. Instead, it pays an annual fee so Illinois residents can use the federal exchange.

That will change under House Bill 579, which calls on the Department of Insurance to set up a state-based exchange that will be fully operational by 2026.

Dana Popish Severinghaus, director of the Insurance Department, said during an interview after the bill signing that having a state-based exchange ultimately will make it easier for Illinois consumers to shop for insurance.

“I think it’s ultimately our goal that Illinois consumers can have a one-stop shop where, whether they need to enroll in an ACA plan or a Medicaid plan or, you know, their family is split, we can do that in one place for them to make it as easy as possible,” she said.

Pritzker said on Tuesday having a state-based exchange will give Illinois the flexibility to offer more enrollment periods during the year than the federal exchange offers and to coordinate with nonprofit organizations that help people navigate the marketplace.

But perhaps more importantly, Pritzker said, it will protect Illinois consumers from any potential changes in federal policy.  During the Trump administration, funding for advertising and nonprofit groups to help people sign up for insurance were slashed and the yearly number of enrollment days was cut roughly in half.

“I’m suggesting that if Joe Biden were to lose reelection to a Republican, that people nationally would lose their health care coverage or lose their access to that federal exchange, but they won’t lose access to the Illinois exchange,” Pritzker said.

Pritzker also signed House Bill 2296, which, for the first time, gives Illinois insurance regulators authority to review health insurance rate changes and, if necessary, modify or reject those proposed changes – authority that regulators in 41 other states already have.

Under the bill, beginning in 2025, companies that offer individual and small group health insurance policies will have to submit their proposed rates for the following year to the Insurance Department, which will post those flings on its website. After a 30-day public comment period, the department will either approve, modify or reject the proposed rate changes.

The bill also calls on the department to publish an annual report on health insurance coverage, affordability and cost trends in Illinois, including such things as cost trends by major service category, including prescription drugs; utilization patterns by major service category; the impact of benefit changes; enrollment trends; and demographic shifts.

State Sen. Laura Fine, D-Glenview, said during a separate interview before the bill signing that those changes will make the pricing of health insurance more transparent to consumers and give regulators the ability to determine whether consumers are being overcharged.

“The insurance industry, they file their plans with the Department of Insurance, and although the department goes through the actuarial process, they can’t reject a rate,” she said.

Under the new law, she said, regulators will be able to reject rates that are unreasonably high as well as rates that are so low that they could put the insurance company in financial risk.

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