TL/DR –
The Illinois House of Representatives has passed the “Healthcare Protection Act” that curbs some practices used by health insurance companies to control health care services costs. The bill bans the practice of step therapy in prescription drug plans, prohibits insurers from requiring prior authorization before covering in-patient psychiatric treatment costs, and requires insurers to conduct provider networks audits every 90 days. The bill also provides the Illinois Department of Insurance with the authority to review and either approve or disapprove rate hikes in large-group insurance plans.
Illinois’ Health Insurance Industry Overhaul Passes House Vote
The “Healthcare Protection Act,” House Bill 5395 celebrated by Gov. JB Pritzker, promises to restrict certain cost-control practices used by health insurance companies. The bill passed the House on a bipartisan vote of 81-25 and now moves to the Senate.
What Does the Healthcare Protection Act Include?
The Healthcare Protection Act aims to restrict insurance companies from using “utilization management” practices. It will require insurers to base treatment coverage decisions on “generally accepted standards of care.” The bill also bans the ‘step therapy’ or ‘fail first’ practice, preventing insurers from requiring patients to use cheaper drugs before approving other treatments. It also prohibits prior authorization for in-patient psychiatric treatment.
Additional Provisions
Besides, the bill mandates insurance companies to audit their provider networks every 90 days. It also aims to ban the sale of short-term, limited duration insurance policies that don’t meet the Affordable Care Act’s minimum standards in Illinois. The Illinois Department of Insurance would gain authority to review and approve or reject rate rises in large-group insurance plans, mirroring its authority over small-group plans.
Bill’s Scope
The bill will apply to employer-based health plans, state’s Medicaid program, and plans covering state and local government employees and local school districts. It will not affect self-insured plans as they are regulated under the federal Employee Retirement Income and Security Act of 1974.
Financial Impact of the Bill
Though it can potentially enhance healthcare access, the bill could cost the state an estimated $40 million to $50 million due to higher Medicaid and state employee health plan costs, according to Emily Miller, a senior advisor in Pritzker’s office.
Next Steps
With the House deadline for passing bills to the Senate being Friday, it’s now the Senate’s turn to consider the bill. The Governor plans to promote the health insurance reform plan across the state in the coming week.
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