TL/DR –
The Illinois House has passed healthcare initiatives proposed by Governor J.B. Pritzker, targeting controversial insurance industry practices. The legislation includes prohibitions on step therapy, where patients are required by insurers to try alternative, often cheaper, treatments before proceeding with those recommended by their doctors. The insurance industry dropped its opposition to most of the proposed changes, but continues to oppose a ban on certain short-term, high-cost insurance plans.
Illinois Passes Healthcare Legislation to Prohibit Controversial Insurance Practices
Illinois House has given the green light to healthcare initiatives championed by Governor J.B. Pritzker, which includes banning insurance industry practices mandating patients to try alternative treatments against their physician’s advice. The bill’s successful passage is a triumph for Pritzker, who has tirelessly campaigned against “predatory” insurance practices.
“This win for Illinois families and healthcare providers will save lives and streamline access to care,” declared Pritzker.
Most of the Governor’s initiatives met with acceptance from the insurance industry, except for one legislation aimed at forbidding specific short-term, high-cost insurance plans.
The new legislation will establish a ban on step therapy, a practice where insurers dictate patients to try cheaper alternatives before proceeding with a physician’s recommended treatment. Critics have denounced this approach for delaying essential care, meanwhile, insurers view it as a cost-cutting measure.
According to Laura Minzer, President of the Illinois Life and Health Insurance Council, the step therapy provision for prescription drugs will apply to medications already included in insurance plans. She added that this would provide immediate access to prescribed medication if already covered by the patient’s insurance, with exemptions available in certain cases, thereby maintaining cost efficiency.
The step therapy provision will take effect in 2026.
Democratic Rep. Anna Moeller of Elgin, the bill’s lead sponsor, estimates that the legislation will cost the state insurance plan $35 million and Medicaid $30 million. However, she has previously argued that the reforms will eventually result in long-term savings and improved access to care.
The legislation was passed with bipartisan support in both the House and the Senate.
Another key component of Pritzker’s initiative was a separate bill aiming to ban short-term limited duration plans, which have been criticized for potentially imposing high treatment costs on consumers. These plans offer temporary coverage but can be financially risky. Pritzker has labelled them as “junk plans.”
The Illinois Life and Health Insurance Council opposed the ban on these short-term plans, with the vote split nearly along party lines in the House. Republican Rep. Jeff Keicher refuted the term “junk plans,” explaining that these plans are not only affordable but provide value to Illinois citizens.
The new legislation will also prohibit prior authorization for in-patient mental health care and set stricter standards for healthcare transparency. It aims to address the issue of rising prices for large group insurance as well.
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