Health News

Making Progress Toward a Health Insurance Exchange in Illinois

Last week was an important one for Illinois consumers and small businesses as lawmakers inched closer to establishing a state-run Health Insurance Exchange.

Why is this important? As Timothy Jost, exchange expert writes in a Commonwealth Fund blog: ?The health insurance exchange is the centerpiece of the private insurance reforms in the Affordable Care Act (ACA). If the exchanges function as planned, they will expand coverage to more Americans, reduce insurance costs, and improve the quality of coverage and perhaps of health care itself.? However, if designed poorly, ?experts warn, healthy people could avoid the exchanges, leaving them to sicker people with rising premiums."

First, some background:

On July 14, 2011, Senate bill 1555 was passed and signed by Governor Quinn, which created the Illinois Legislative Health Insurance Exchange Study Committee to aid in going forward with the establishment of a health insurance exchange (also known as the competitive insurance marketplace) in Illinois. The legislative study committee held five meetings, and commissioned two reports, one from Deloitte Consulting on the current state of healthcare in Illinois, and the second from HMA/Wakely Consulting Group, on the possible options and directions the exchange could take. On September 27, 2011, the Committee released a draft report of their findings from the five meetings and the two consultant reports. Although no definite decisions were made in the report, it is still the most substantive picture of the Illinois exchange to date.

Response to the Report:

Most of the report focused on the possibilities that Illinois must consider and decisions that must be made regarding the type of governance and the financing of the exchange. Many organizations weighed in with written comments in response to the report. Below are some of the issues and concerns that have been raised over the policy options outlined in the report:

· The HMA/Wakely report listed two options for the operating model of the exchange: either as a ?market organizer? or ?market developer.? The market organizer approach means that the exchange would simply certify any health insurance plan that met the requirements for the exchange, relying on the competition of the marketplace to keep the cost of insurance down. The market developer style would have the exchange taking a more active approach to use their leveraging power in order to get the best possible value of plans from insurance agencies. Much support has been shown for the market developer option, aligning the exchange model with the interests of consumers for quality, affordable insurance.

· Out of the three options presented for the governmental structure of the exchange, the overwhelming majority of opinions expressed have been in favor of a ?quasi-governmental? model, as opposed to the ?state-run? and ?non-profit? models. The quasi-governmental model would keep the exchange in connection with other state-run agencies that it may need to coordinate with and promote a high level of transparency and accountability, while remaining a higher level of political neutrality.

· The membership of the exchange governing board is one of the hot button topics in the report. The report underscores that members of the board should be well versed in the domain of health care, but should not have conflicts of interest, specifically noting that insurers, agents/brokers, HMOs, Prepaid Service Providers and other individuals with an interest in the Exchange should not be voting members of the board, though they could be members of an advisory committee. Some groups are advocating for a list of constituencies that must be represented on the board (for example, more representative of minority populations who are over-represented among the uninsured), while others think that a list of that nature would cause more problems for the board than it would solve. Another major concern is whether or not legislators should be allowed on the board. Many groups have expressed their disapproval of legislators holding seats on the board ? so that the exchange could be truly independent, non-partisan, and non-political ? although some see their presence as non-voting members as a possibility.

· To finance the exchange, there are many options on the table, including charging consumers a fee to access the exchange, assessments on health plans offered in the new marketplace, assessments on all Illinois health insurance companies, the use of state general revenue, levying a fee on all health care stakeholders in the state (a list that could include prescription drug and medical supply companies, providers, hospitals, etc.), or assessing a progressive surtax on the revenues of all insurance providers. Many advocacy groups are against the idea of a fee to consumers, as the exchange targets those who are currently uninsured, who typically tend to have lower incomes, and could be put off or prevented from using the exchange if there is a fee. However, there are doubts that a funding option like the insurance revenue surtax would be approved. Some groups have stated that the best option might be for the enacting legislation to leave open the description of funding, so as to allow for multiple sources.

Stay tuned! The final report will be issued this week and we?ll let you know if there are any changes.

- What Is The Illinois Partnership Health Insurance Marketplace?
The Affordable Care Act requires each state to have a health insurance marketplace (otherwise known as a "health insurance exchange"). Originally, the plan was for each state to establish its own health insurance marketplace, or default to a federally-run...

- Latest Developments In The Implementation Of An Illinois Health Benefits Exchange: Senate Bill 1313
Back in the spring, the Illinois General Assembly passed a bill enacting the intent to create a health benefits exchange, a state-wide marketplace called for by the federal Affordable Care Act that will act as a tool to aid consumers to shop for insurance....

- Making The Grade: A Scorecard For State Health Insurance Exchanges
According to the Illinois Department of Insurance, health insurance premiums have risen on average 181 percent since 2005. This could be the week action is taken in Illinois to fix our health insurance marketplace for Illinois families and small businesses....

- It?s Finally Happening
A legislative taskforce is working right now on ways to increase competition in the Illinois health insurance marketplace, and they?ll make recommendations by September 30th. Insurance lobbyists have come to Springfield to prevent anything that might...

- Top Ten Things You Should Know About Lllinois Health Care Reform
On February 7, 2011, Governor Quinn's Illinois Health Care Reform Implementation Council held a public hearing to release its initial recommendations on the implementation of the Affordable Care Act in Illinois. The recommendations, which include...

Health News