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
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Health Insurance Coverage Premium Misalignment Study Act.
 
6    Section 5. Purpose. This Act is intended to enable the
7State to study possible misalignment in the Illinois health
8insurance marketplace that would produce increased premium or
9cost sharing for some consumers and drive some consumers into
10lower value qualified health plans or out of the marketplace
11altogether.
 
12    Section 10. Findings. The General Assembly finds that:
13    (1) Section 1402 of the Patient Protection and Affordable
14Care Act requires health insurance issuers to provide
15cost-sharing reductions to low-income marketplace consumers

 

 

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1below the 250% federal poverty level who choose a silver level
2plan; it also requires the United States Department of Health
3and Human Services to reimburse issuers for cost-sharing
4reductions. Cost-sharing reductions are important because they
5help low-income marketplace consumers afford out-of-pocket
6costs, including deductibles and copayments, and therefore
7keep them in the marketplace.
8    (2) On October 12, 2017, the federal government, through
9executive action, announced that it would be discontinuing
10cost-sharing reduction payments to issuers in the Patient
11Protection and Affordable Care Act marketplace. Illinois, like
12the majority of other states, took action to mitigate the
13losses that Illinois issuers would endure without the federal
14cost-sharing reduction payments by adopting a practice called
15"silver loading" or "cost-sharing reduction uncertainty cost"
16beginning in the 2018 plan year. Silver loading allows issuers
17to increase their silver plan baseline premiums to make up the
18costs lost from the missing federal cost-sharing reduction
19payments. Most of these premium increases are offset by higher
20advanced premium tax credits from the federal government.
21    (3) However, due to silver loading and resulting pricing
22of silver plans in the Illinois marketplace, it appears that
23the current metal-level premiums in the Illinois marketplace
24are misaligned and do not reflect coverage generosity of the
25plans. The fact that silver plans are now overpriced for
26enrollees ineligible for generous cost-sharing reductions has

 

 

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1driven some of those enrollees into non-silver (mostly bronze)
2plans with levels of cost sharing that are a worse match for
3their needs. In other words, Illinois marketplace consumers
4could be currently paying more than they should for low value
5plans 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
8explore rate setting approaches that may yield a misalignment
9of premiums across different tiers of coverage in Illinois'
10individual health insurance market. The study shall examine
11these approaches with a view to attempts to make coverage more
12affordable for low-income and middle-income residents. The
13study shall follow the best practices of other states targeted
14at addressing metal-level premium misalignment and include an
15Illinois-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
8residents addressing metal-level premium misalignment policy
9as studied in subsection (a) along with the impact of the
10policy on health insurance affordability and access and the
11uninsured rates for low-income and middle-income residents,
12with break-out data by geography, race, ethnicity, and income
13level. The study shall evaluate how premium realignment if
14implemented would affect costs and outcomes for Illinoisans.
15    (c) The Department of Insurance shall develop and submit,
16no later than January 1, 2024, a report to the General Assembly
17and the Governor concerning the design, costs, benefits, and
18implementation of premium realignment to increase
19affordability and access to health care coverage that
20leverages existing State infrastructure.
 
21    Section 105. The Illinois Insurance Code is amended by
22changing 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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1policies-Provisions.)
2    (a) As used in this Section, "unreasonable rate increase"
3means a rate increase that the Director determines to be
4excessive, unjustified, or unfairly discriminatory in
5accordance with 45 CFR 154.205.
6    (b) No policy of insurance against loss or damage from the
7sickness, or from the bodily injury or death of the insured by
8accident shall be issued or delivered to any person in this
9State until a copy of the form thereof and of the
10classification of risks and the premium rates pertaining
11thereto have been filed with the Director; nor shall it be so
12issued or delivered until the Director shall have approved
13such policy pursuant to the provisions of Section 143. If the
14Director disapproves the policy form he shall make a written
15decision stating the respects in which such form does not
16comply with the requirements of law and shall deliver a copy
17thereof to the company and it shall be unlawful thereafter for
18any such company to issue any policy in such form.
19    (c) All individual and small group accident and health
20policies written in compliance with the Patient Protection and
21Affordable Care Act must file rates with the Department for
22approval. Rate increases found to be unreasonable rate
23increases in relation to benefits under the policy provided
24shall be disapproved. The Department shall provide a report to
25the General Assembly on or after January 1, 2023, regarding
26both on and off exchange individual and small group rates in

 

 

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1the Illinois market.
2    (d) A rate increase filed under this Section must be
3approved or denied within 60 calendar days after the date the
4rate increase is filed with the Department. Any rate increase
5that is not approved or denied by the Department shall
6automatically be approved on the 61st calendar day.
7    (e) No less than 30 days after the federal Centers for
8Medicare and Medicaid Services has certified the policies
9described in this Section for the upcoming plan year, the
10Department shall publish on its website a report explaining
11the rates for the subsequent calendar year's certified
12policies.
13(Source: P.A. 79-777.)
 
14    Section 110. The Health Maintenance Organization Act is
15amended 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,
18Material Modifications. A health maintenance organization
19shall file with the Director, prior to use, a notice of any
20change in rate methodology, or benefits and of any material
21modification of any matter or document furnished pursuant to
22Section 2-1, together with such supporting documents as are
23necessary 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
2form agreements between the organization and enrollees,
3providers, administrators of services and insurers of health
4maintenance organizations.
5    (b) Material transactions or series of transactions other
6than those described in subsection (a) of this Section, the
7total annual value of which exceeds the greater of $100,000 or
85% of net earned subscription revenue for the most current
9twelve month period as determined from filed financial
10statements.
11    (c) Any agreement between the organization and an insurer
12shall be subject to the provisions of the laws of this State
13regarding reinsurance as provided in Article XI of the
14Illinois Insurance Code. All reinsurance agreements must be
15filed. Approval of the Director is required for all agreements
16except the following: individual stop loss, aggregate excess,
17hospitalization benefits or out-of-area of the participating
18providers unless 20% or more of the organization's total risk
19is reinsured, in which case all reinsurance agreements require
20approval.
21    (d) All individual and small group accident and health
22policies written in compliance with the Patient Protection and
23Affordable Care Act must file rates with the Department for
24approval. Rate increases found to be unreasonable rate
25increases in relation to benefits under the policy provided
26shall be disapproved. The Department shall provide a report to

 

 

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1the General Assembly on or after January 1, 2023, regarding
2both on and off exchange individual and small group rates in
3the Illinois market.
4    (e) A rate increase filed under this Section must be
5approved or denied within 60 calendar days after the date the
6rate increase is filed with the Department. Any rate increase
7that is not approved or denied by the Department shall
8automatically be approved on the 61st calendar day.
9    (f) No less than 30 days after the federal Centers for
10Medicare and Medicaid Services has certified the policies
11described in this Section for the upcoming plan year, the
12Department shall publish on its website a report explaining
13the rates for the subsequent calendar year's certified
14policies.
15    (g) As used in this Section, "unreasonable rate increase"
16means a rate increase that the Director determines to be
17excessive, unjustified, or unfairly discriminatory in
18accordance with 45 CFR 154.205.
19(Source: P.A. 86-620.)".