Full Text of HB1465 102nd General Assembly
HB1465ham001 102ND GENERAL ASSEMBLY | Rep. Bob Morgan Filed: 4/4/2022
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| 1 | | AMENDMENT TO HOUSE BILL 1465
| 2 | | AMENDMENT NO. ______. Amend House Bill 1465 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Health Insurance Coverage Premium Misalignment Study Act. | 6 | | Section 5. Purpose. This Act is intended to enable the | 7 | | State to study possible misalignment in the Illinois health | 8 | | insurance marketplace that would produce increased premium or | 9 | | cost sharing for some consumers and drive some consumers into | 10 | | lower value qualified health plans or out of the marketplace | 11 | | altogether. | 12 | | Section 10. Findings. The General Assembly finds that: | 13 | | (1) Section 1402 of the Patient Protection and Affordable | 14 | | Care Act requires health insurance issuers to provide | 15 | | cost-sharing reductions to low-income marketplace consumers |
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| 1 | | below the 250% federal poverty level who choose a silver level | 2 | | plan; it also requires the United States Department of Health | 3 | | and Human Services to reimburse issuers for cost-sharing | 4 | | reductions. Cost-sharing reductions are important because they | 5 | | help low-income marketplace consumers afford out-of-pocket | 6 | | costs, including deductibles and copayments, and therefore | 7 | | keep them in the marketplace.
| 8 | | (2) On October 12, 2017, the federal government, through | 9 | | executive action, announced that it would be discontinuing | 10 | | cost-sharing reduction payments to issuers in the Patient | 11 | | Protection and Affordable Care Act marketplace. Illinois, like | 12 | | the majority of other states, took action to mitigate the | 13 | | losses that Illinois issuers would endure without the federal | 14 | | cost-sharing reduction payments by adopting a practice called | 15 | | "silver loading" or "cost-sharing reduction uncertainty cost" | 16 | | beginning in the 2018 plan year. Silver loading allows issuers | 17 | | to increase their silver plan baseline premiums to make up the | 18 | | costs lost from the missing federal cost-sharing reduction | 19 | | payments. Most of these premium increases are offset by higher | 20 | | advanced premium tax credits from the federal government.
| 21 | | (3) However, due to silver loading and resulting pricing | 22 | | of silver plans in the Illinois marketplace, it appears that | 23 | | the current metal-level premiums in the Illinois marketplace | 24 | | are misaligned and do not reflect coverage generosity of the | 25 | | plans. The fact that silver plans are now overpriced for | 26 | | enrollees ineligible for generous cost-sharing reductions has |
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| 1 | | driven some of those enrollees into non-silver (mostly bronze) | 2 | | plans with levels of cost sharing that are a worse match for | 3 | | their needs. In other words, Illinois marketplace consumers | 4 | | could be currently paying more than they should for low value | 5 | | plans and less than they should for high value plans.
| 6 | | Section 15. Premium misalignment study. | 7 | | (a) The Department of Insurance shall oversee a study to | 8 | | explore rate setting approaches that may yield a misalignment | 9 | | of premiums across different tiers of coverage in Illinois' | 10 | | individual health insurance market. The study shall examine | 11 | | these approaches with a view to attempts to make coverage more | 12 | | affordable for low-income and middle-income residents. The | 13 | | study shall follow the best practices of other states targeted | 14 | | at addressing metal-level premium misalignment and include an | 15 | | Illinois-specific analysis of: | 16 | | (1) the number of consumers who are eligible for a | 17 | | premium subsidy under the Patient Protection and | 18 | | Affordable Care Act (Pub. L. 111-148) and the relative | 19 | | affordability of the plans;
| 20 | | (2) if the plan is in the silver level, as described by | 21 | | 42 U.S.C. 18022(d), the relation of the premium amount | 22 | | compared to premiums charged for qualified health plans | 23 | | offering different levels of coverage, taking into account | 24 | | any funding or lack of funding for cost-sharing reductions | 25 | | and the covered benefits for each level of coverage; and |
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| 1 | | (3) whether the plan issuer utilized the induced | 2 | | demand factors developed by the Centers for Medicare and | 3 | | Medicaid Services for the risk adjustment program | 4 | | established under 42 U.S.C. 18063 for the level of | 5 | | coverage offered by the plan or any State-specific induced | 6 | | demand factors established by Department rules. | 7 | | (b) The study shall produce cost estimates for Illinois | 8 | | residents addressing metal-level premium misalignment policy | 9 | | as studied in subsection (a) along with the impact of the | 10 | | policy on health insurance affordability and access and the | 11 | | uninsured rates for low-income and middle-income residents, | 12 | | with break-out data by geography, race, ethnicity, and income | 13 | | level. The study shall evaluate how premium realignment if | 14 | | implemented would affect costs and outcomes for Illinoisans. | 15 | | (c) The Department of Insurance shall develop and submit, | 16 | | no later than January 1, 2024, a report to the General Assembly | 17 | | and the Governor concerning the design, costs, benefits, and | 18 | | implementation of premium realignment to increase | 19 | | affordability and access to health care coverage that | 20 | | leverages existing State infrastructure. | 21 | | Section 105. The Illinois Insurance Code is amended by | 22 | | changing Section 355 as follows:
| 23 | | (215 ILCS 5/355) (from Ch. 73, par. 967)
| 24 | | Sec. 355. Accident
and health policies; provisions. |
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| 1 | | policies-Provisions.)
| 2 | | (a) As used in this Section, "unreasonable rate increase" | 3 | | means a rate increase that the Director determines to be | 4 | | excessive, unjustified, or unfairly discriminatory in | 5 | | accordance with 45 CFR 154.205. | 6 | | (b) No policy of insurance against loss or damage from the | 7 | | sickness, or from
the bodily injury or death of the insured by | 8 | | accident shall be issued or
delivered to any person in this | 9 | | State until a copy of the form thereof and
of the | 10 | | classification of risks and the premium rates pertaining | 11 | | thereto
have been filed with the Director; nor shall it be so | 12 | | issued or delivered
until the Director shall have approved | 13 | | such policy pursuant to the provisions
of Section 143. If the | 14 | | Director
disapproves the policy form he shall make a written | 15 | | decision stating the
respects in which such form does not | 16 | | comply with the requirements of law
and shall deliver a copy | 17 | | thereof to the company and it shall be unlawful
thereafter for | 18 | | any such company to issue any policy in such form. | 19 | | (c) All individual and small group accident and health | 20 | | policies written in compliance with the Patient Protection and | 21 | | Affordable Care Act must file rates with the Department for | 22 | | approval. Rate increases found to be unreasonable rate | 23 | | increases in relation to benefits under the policy provided | 24 | | shall be disapproved. The Department shall provide a report to | 25 | | the General Assembly on or after January 1, 2023, regarding | 26 | | both on and off exchange individual and small group rates in |
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| 1 | | the Illinois market.
| 2 | | (d) A rate increase filed under this Section must be | 3 | | approved or denied within 60 calendar days after the date the | 4 | | rate increase is filed with the Department. Any rate increase | 5 | | that is not approved or denied by the Department shall | 6 | | automatically be approved on the 61st calendar day. | 7 | | (e) No less than 30 days after the federal Centers for | 8 | | Medicare and Medicaid Services has certified the policies | 9 | | described in this Section for the upcoming plan year, the | 10 | | Department shall publish on its website a report explaining | 11 | | the rates for the subsequent calendar year's certified | 12 | | policies. | 13 | | (Source: P.A. 79-777.)
| 14 | | Section 110. The Health Maintenance Organization Act is | 15 | | amended by changing Section 4-12 as follows:
| 16 | | (215 ILCS 125/4-12) (from Ch. 111 1/2, par. 1409.5)
| 17 | | Sec. 4-12. Changes in Rate Methodology and Benefits, | 18 | | Material
Modifications. A health maintenance organization | 19 | | shall file with the
Director, prior to use, a notice of any | 20 | | change in rate methodology, or
benefits and of any material | 21 | | modification of any matter or document
furnished pursuant to | 22 | | Section 2-1, together with such supporting documents
as are | 23 | | necessary to fully explain the change or modification.
| 24 | | (a) Contract modifications described in subsections |
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| 1 | | (c)(5), (c)(6) and
(c)(7) of Section 2-1 shall include all | 2 | | form agreements between the
organization and enrollees, | 3 | | providers, administrators of services and
insurers of health | 4 | | maintenance organizations.
| 5 | | (b) Material transactions or series of transactions other | 6 | | than those
described in subsection (a) of this Section, the | 7 | | total annual value of
which exceeds the greater of $100,000 or | 8 | | 5% of net earned subscription
revenue for the most current | 9 | | twelve month period as determined from filed
financial | 10 | | statements.
| 11 | | (c) Any agreement between the organization and an insurer | 12 | | shall be
subject to the provisions of the laws of this State | 13 | | regarding reinsurance
as provided in Article XI of the | 14 | | Illinois Insurance Code. All reinsurance
agreements must be | 15 | | filed. Approval of the Director is required for all
agreements | 16 | | except the following: individual stop loss, aggregate excess,
| 17 | | hospitalization benefits or out-of-area of the participating | 18 | | providers
unless 20% or more of the organization's total risk | 19 | | is reinsured, in which
case all reinsurance agreements require | 20 | | approval. | 21 | | (d) All individual and small group accident and health | 22 | | policies written in compliance with the Patient Protection and | 23 | | Affordable Care Act must file rates with the Department for | 24 | | approval. Rate increases found to be unreasonable rate | 25 | | increases in relation to benefits under the policy provided | 26 | | shall be disapproved. The Department shall provide a report to |
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| 1 | | the General Assembly on or after January 1, 2023, regarding | 2 | | both on and off exchange individual and small group rates in | 3 | | the Illinois market.
| 4 | | (e) A rate increase filed under this Section must be | 5 | | approved or denied within 60 calendar days after the date the | 6 | | rate increase is filed with the Department. Any rate increase | 7 | | that is not approved or denied by the Department shall | 8 | | automatically be approved on the 61st calendar day. | 9 | | (f) No less than 30 days after the federal Centers for | 10 | | Medicare and Medicaid Services has certified the policies | 11 | | described in this Section for the upcoming plan year, the | 12 | | Department shall publish on its website a report explaining | 13 | | the rates for the subsequent calendar year's certified | 14 | | policies. | 15 | | (g) As used in this Section, "unreasonable rate increase" | 16 | | means a rate increase that the Director determines to be | 17 | | excessive, unjustified, or unfairly discriminatory in | 18 | | accordance with 45 CFR 154.205. | 19 | | (Source: P.A. 86-620.)".
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