A State-Level Step Toward Health Insurance Reform
By Angela Caputo
Last spring, the insurance industry "used every trick in the book" to try to thwart a set of consumer-friendly reforms -- known as the Health Insurance Consumer Protection Act (HB 3923) -- that State Rep. Greg Harris (D-Chicago) was pushing in the House. But by assembling an unlikely coalition of consumer advocates and business groups, both of whom felt ripped off by the industry's practices, Harris managed to keep health insurance companies at the table. And with the help of State Sen. Heather Steans (D-Chicago), he passed a bill that extends an independent review process to consumers who are denied coverage and includes transparency on how much of sky-rocketing premiums are actually being spent on medical costs. The accomplishment caught the eye of former Paul Simon Public Policy Institute director Mike Lawrence, who lauded the bill as one of the most significant (and unnoticed) accomplishments in Springfield this year.
The measure's assorted allies -- from the Illinois Public Interest Research Group and Citizen Action/Illinois to the Illinois Chamber of Commerce -- joined Gov. Pat Quinn today as he signed the measure into law. "When I first introduced this bill, we were looking to do some very simple and important things for the people of Illinois," Harris said during the signing ceremony. He added that he was ultimately struck by "how we in Illinois have set ourselves up as potential leaders in insurance reform."
Beginning on July 1, Illinois consumers will have the right to challenge efforts to block insurance claims. This process will feature an external review conducted by an independent doctor who is selected by a nationally-recognized Independent Review Organization. The sole standard of such a review will be "the best medical practice for the patient," Illinois Insurance Director Michael McRaith pointed out today. And the insurance companies themselves will have to pick up the tab. The Illinois Insurance Department will also have the authority to override rejections, provided that the decision is made "solely on the legal or medical merits of the claim."
The new rules represent a boon to the roughly three million Illinoisans who are insured but aren't afforded an external review under their current policies, as well as the millions more who are expected to gain coverage under the health care reform package at the national level. The Tribune explains:
Most analysts expect the uninsured to buy coverage from state-regulated plans that will be offered on newly created exchanges, or an insurance marketplace, many using federal subsidies.
"While some companies may have afforded consumers some opportunity for an independent review, now all companies will be required to pay for an independent external review," aid Illinois Insurance Director Michael McRaith.
The new law also raises the bar with regards to financial transparency. Starting next year, insurance companies will be required to submit bi-annual income and expense reports that finally reveal how much of the premiums they collect in the Prairie State are actually spent on health care and how much is devoted to advertising, profits, and executive compensation. Meanwhile, they'll be required to streamline the insurance application process into a single document to make comparative shopping easier -- and potentially more affordable -- for both individual consumers and businesses. Both are certain to serve as a framework for carrying out national reforms.
"As the federal government devolves the health care reform onto the states," Harris said this afternoon, "I think we lay a tremendous foundation."