Illinois General Assembly - Full Text of HB0836
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Full Text of HB0836  102nd General Assembly




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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the Health
5Insurance 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
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
16below the 250% federal poverty level who choose a silver level
17plan; it also requires the United States Department of Health
18and Human Services to reimburse issuers for cost-sharing
19reductions. Cost-sharing reductions are important because they
20help low-income marketplace consumers afford out-of-pocket
21costs, including deductibles and copayments, and therefore
22keep them in the marketplace.



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1    (2) On October 12, 2017, the federal government, through
2executive action, announced that it would be discontinuing
3cost-sharing reduction payments to issuers in the Patient
4Protection and Affordable Care Act marketplace. Illinois, like
5the majority of other states, took action to mitigate the
6losses that Illinois issuers would endure without the federal
7cost-sharing reduction payments by adopting a practice called
8"silver loading" or "cost-sharing reduction uncertainty cost"
9beginning in the 2018 plan year. Silver loading allows issuers
10to increase their silver plan baseline premiums to make up the
11costs lost from the missing federal cost-sharing reduction
12payments. Most of these premium increases are offset by higher
13advanced premium tax credits from the federal government.
14    (3) However, due to silver loading and resulting pricing
15of silver plans in the Illinois marketplace, it appears that
16the current metal-level premiums in the Illinois marketplace
17are misaligned and do not reflect coverage generosity of the
18plans. The fact that silver plans are now overpriced for
19enrollees ineligible for generous cost-sharing reductions has
20driven some of those enrollees into non-silver (mostly bronze)
21plans with levels of cost sharing that are a worse match for
22their needs. In other words, Illinois marketplace consumers
23could be currently paying more than they should for low value
24plans and less than they should for high value plans.
25    Section 15. Premium misalignment study.



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1    (a) The Department of Insurance shall oversee a study to
2explore rate setting approaches that may yield a misalignment
3of premiums across different tiers of coverage in Illinois'
4individual health insurance market. The study shall examine
5these approaches with a view to attempts to make coverage more
6affordable for low-income and middle-income residents. The
7study shall follow the best practices of other states targeted
8at addressing metal-level premium misalignment and include an
9Illinois-specific analysis of:
10        (1) the number of consumers who are eligible for a
11    premium subsidy under the Patient Protection and
12    Affordable Care Act (Pub. L. 111-148) and the relative
13    affordability of the plans;
14        (2) if the plan is in the silver level, as described by
15    42 U.S.C. 18022(d), the relation of the premium amount
16    compared to premiums charged for qualified health plans
17    offering different levels of coverage, taking into account
18    any funding or lack of funding for cost-sharing reductions
19    and the covered benefits for each level of coverage; and
20        (3) whether the plan issuer utilized the induced
21    demand factors developed by the Centers for Medicare and
22    Medicaid Services for the risk adjustment program
23    established under 42 U.S.C. 18063 for the level of
24    coverage offered by the plan or any State-specific induced
25    demand factors established by Department rules.
26    (b) The study shall produce cost estimates for Illinois



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1residents addressing metal-level premium misalignment policy
2as studied in subsection (a) along with the impact of the
3policy on health insurance affordability and access and the
4uninsured rates for low-income and middle-income residents,
5with break-out data by geography, race, ethnicity, and income
6level. The study shall evaluate how premium realignment, if
7implemented, would affect costs and outcomes for Illinoisans.
8    (c) The Department of Insurance shall develop and submit,
9no later than January 1, 2024, a report to the General Assembly
10and the Governor concerning the design, costs, benefits, and
11implementation of premium realignment to increase
12affordability and access to health care coverage that
13leverages existing State infrastructure.