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


Sen. Laura Fine

Filed: 4/7/2022





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2    AMENDMENT NO. ______. Amend House Bill 836 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Short title. This Act may be cited as the
5Health Insurance 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



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1below the 250% federal poverty level who choose a silver level
2plan; it also requires the United States Department of Health
3and Human Services to reimburse issuers for cost-sharing
4reductions. Cost-sharing reductions are important because they
5help low-income marketplace consumers afford out-of-pocket
6costs, including deductibles and copayments, and therefore
7keep them in the marketplace.
8    (2) On October 12, 2017, the federal government, through
9executive action, announced that it would be discontinuing
10cost-sharing reduction payments to issuers in the Patient
11Protection and Affordable Care Act marketplace. Illinois, like
12the majority of other states, took action to mitigate the
13losses that Illinois issuers would endure without the federal
14cost-sharing reduction payments by adopting a practice called
15"silver loading" or "cost-sharing reduction uncertainty cost"
16beginning in the 2018 plan year. Silver loading allows issuers
17to increase their silver plan baseline premiums to make up the
18costs lost from the missing federal cost-sharing reduction
19payments. Most of these premium increases are offset by higher
20advanced premium tax credits from the federal government.
21    (3) However, due to silver loading and resulting pricing
22of silver plans in the Illinois marketplace, it appears that
23the current metal-level premiums in the Illinois marketplace
24are misaligned and do not reflect coverage generosity of the
25plans. The fact that silver plans are now overpriced for
26enrollees ineligible for generous cost-sharing reductions has



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1driven some of those enrollees into non-silver (mostly bronze)
2plans with levels of cost sharing that are a worse match for
3their needs. In other words, Illinois marketplace consumers
4could be currently paying more than they should for low value
5plans and less than they should for high value plans.
6    Section 15. Premium misalignment study.
7    (a) The Department of Insurance shall oversee a study to
8explore rate setting approaches that may yield a misalignment
9of premiums across different tiers of coverage in Illinois'
10individual health insurance market. The study shall examine
11these approaches with a view to attempts to make coverage more
12affordable for low-income and middle-income residents. The
13study shall follow the best practices of other states targeted
14at addressing metal-level premium misalignment and include an
15Illinois-specific analysis of:
16        (1) the number of consumers who are eligible for a
17    premium subsidy under the Patient Protection and
18    Affordable Care Act (Pub. L. 111-148) and the relative
19    affordability of the plans;
20        (2) if the plan is in the silver level, as described by
21    42 U.S.C. 18022(d), the relation of the premium amount
22    compared to premiums charged for qualified health plans
23    offering different levels of coverage, taking into account
24    any funding or lack of funding for cost-sharing reductions
25    and the covered benefits for each level of coverage; and



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1        (3) whether the plan issuer utilized the induced
2    demand factors developed by the Centers for Medicare and
3    Medicaid Services for the risk adjustment program
4    established under 42 U.S.C. 18063 for the level of
5    coverage offered by the plan or any State-specific induced
6    demand factors established by Department rules.
7    (b) The study shall produce cost estimates for Illinois
8residents addressing metal-level premium misalignment policy
9as studied in subsection (a) along with the impact of the
10policy on health insurance affordability and access and the
11uninsured rates for low-income and middle-income residents,
12with break-out data by geography, race, ethnicity, and income
13level. The study shall evaluate how premium realignment, if
14implemented, would affect costs and outcomes for Illinoisans.
15    (c) The Department of Insurance shall develop and submit,
16no later than January 1, 2024, a report to the General Assembly
17and the Governor concerning the design, costs, benefits, and
18implementation of premium realignment to increase
19affordability and access to health care coverage that
20leverages existing State infrastructure.".