Gov. JB Pritzker plans to take on the state’s health insurance industry this year by calling for legislation to curb many of the standard practices they use to hold down costs and boost profits.
He plans to outline those reforms in his State of the State and budget address Wednesday, according to an advance excerpt of his speech, kicking off a process that will eventually require approval from lawmakers.
Pritzker’s “Healthcare Consumer Access and Protection Act” will include a package of proposals aimed at controlling strategies that insurers use to reduce the amount of health care patients receive.
It also includes new requirements for insurers to offer enough in-network doctors to meet consumers’ needs, as well as state regulatory control over rate increases in the large group insurance plans similar to regulations lawmakers approved last year for small group policies.
In the speech scheduled for delivery at noon today, a portion of which was provided to Capitol News Illinois in advance, Pritzker says he expects stiff resistance from the insurance industry. But he says he is prepared “to spend serious political capital” to pass the legislation.
“It will save lives and lower healthcare costs for millions of Illinoisans,” Pritzker plans to say.
The first part of the package targets what are often called “utilization management” practices by insurance companies that are designed to control the amount of services a patient receives and steer them toward lower-cost options.
Those include “prior authorization” requirements in which consumers must get advance permission from the insurance company to receive treatment recommended by their doctor. Pritzker will propose banning the use of prior authorization requirements in one specific area of health care – in-patient mental health care for both children and adults – making Illinois the first state in the nation to do so.
Pritzker will also call for an end to another kind of utilization management, so-called “step therapy” for prescription drugs. Sometimes referred to as “fail first” therapy, that’s a requirement that patients first try one or more lower-cost, alternative medications before the insurance company will cover a higher-cost drug prescribed by a doctor.
Pritzker’s plan also calls for banning the sale of Short-Term Limited-Duration Insurance plans in Illinois. Those are plans people typically buy to fill gaps in coverage, such as when they’re transitioning from one job to another.
But while they are often less expensive than regular insurance, they are exempt under federal law from many requirements of the Affordable Care Act such as prohibitions against discrimination on the basis of preexisting conditions or monetary caps on benefits.
Another part of Pritzker’s proposal would require insurance companies to regularly update their network directories to make sure the providers listed are actually part of the company’s network and are available to accept patients.
That provision is aimed at cracking down on so-called “ghost networks,” a reference to directories that list doctors and specialists who aren’t accepting new patients, who are no longer in the company’s network, or who don’t actually exist at all.
Finally, Pritzker’s plan will call for giving the Illinois Department of Insurance authority to review, approve, or reject proposed rate increases in the large group market, which includes plans that cover 51 or more employees of an organization. Last year, Pritzker signed legislation authorizing the department to conduct rate reviews for policies covering individuals and groups of 50 or fewer employees.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
