Illinois is Cracking Down on Unreasonable Health Insurance Premium Hikes
For too long, insurance companies in many States have increased health insurance premiums with little oversight, transparency, or public accountability. Some States have both the authority and the capacity to review insurers’ proposed health insurance premium increases. Just 26 States and the District of Columbia have the authority to reject a proposed increase that is excessive, lacks justification or exceeds certain standards. Many do not, and some who have the authority lack the right tools to exercise that authority to reject excessive premium increases. This lack of authority and resources for States has unfortunately contributed to unjustified premium increases. Health insurance premiums have doubled on average over the last 10 years, much faster than wages and inflation, putting coverage out of reach for millions of Americans and business owners.
The Affordable Care Act provides States with $250 million in Health Insurance Premium Review Grants over five years to help states like Illinois help transform the way they review proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes, and ensure consumers receive value for their premium dollars.
On August 16, the Department of Health and Human Services announced the award of $46 million in the first round of these grants, including $1 million for Illinois. The following is a general summary of how Illinois intends to use its funding:
- Pursue Additional Legislative Authority: Illinois currently does not have explicit rate review authority. The State intends to seek authority to review and approve health insurance premium rates and to disclose premium filings.
- Expand the Scope of the Review Process: Illinois will initiate health insurance premium review and approval for all forms of major medical coverage.
- Improve the Review Process: Illinois will develop the capacity to conduct prospective actuarial review on all major medical premium increases. The State will develop new rate filing and review protocols.
- Increase Transparency and Accessibility: Health insurance premium filings are not currently available to consumers. Illinois will start posting filings. Additionally the State will conduct public hearings on proposed rate increases. It will also develop interactive tools to help users navigate insurance premium information on its website. Illinois will also translate web and print health insurance information into Spanish, Polish and Korean.
- Develop and Upgrade Technology: Illinois will develop new information technology systems to help conduct health insurance premium reviews.
The Health Insurance Premium Review Grants are one element of a broad effort under the Affordable Care Act to reduce the unsustainable rates of increase proposed by some insurers today. Additional resources from this $250 million program for rate review will be available in subsequent years to further strengthen State health insurance premium review procedures.