INSIGHT | government
Summary: Illinois Issues Feasibility Report For Cove On July 7, 2020, Governor Pritzker signed SB1864. The legislation instructed the Department of Healthcare and Family Services (HFS), in consultation with the Department of Insurance (DOI), together known as the Interagency Working Group, to oversee a feasibility study exploring policy options to make health insurance more affordable for low- and middle-income Illinois residents. This study was designed to provide policymakers with a menu of policy options to improve health care affordability, reduce the number of uninsured residents, and improve health equity. The process was open to responses from all stakeholders, including the public by the end of February 2021. The Coalition of Insurance Agents and Broker of Illinois, of which I was a part of, representing Independent Insurance Agents of Illinois, along with the Illinois State Association of Health Underwriters and NAIFA of Illinois submitted a response. We stated our firm belief that every American should have access to affordable, comprehensive healthcare coverage and control over their healthcare choices regardless of their health status, income, or pre-existing conditions. We also explained the critical role Agents and Brokers play in helping individuals and businesses with carrier and plan negotiation and selection, member enrollment and education, claims advocacy and more. In preparing our response we met with many stakeholders including representatives from hospitals, physicians, pharma and insurance carriers. We also met with NAHU and Big I National representatives who introduced us to other states who experienced or were in the middle of similar state actions. This provided a great base for our response. After review of the responses, the Interagency Working Group released their Feasibility Study Report on April 2, 2021. They identified six policy options for inclusion in the study, each of which were considered separately, but could be pursued in various combinations. The Working Group directed Milliman to model outcomes. Milliman did a very good job with their review in illustrating the pros and cons of each option and provided cost forecasts on several models. From my reading, it appeared no one option would solve the problem in full, that is, reduce the number of uninsured, increase affordability and improve health equities, but the study did suggest the pairing of options could help and at least produce lower costs.
A summary of the Feasibility Report follows: Overarching goals of the plan: - Reducing the numbers of uninsured - Increasing affordability, and - Improving health equity
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insight
The following priorities were to be considered: - Improving affordability in terms of both premiums and cost-sharing - Aligning with existing systems and programs - Leveraging federal funding and - Minimizing market disruption The Interagency Working Group identified 6 policy options for inclusion in the study: 1. Basic Health Program (BPH) – In lieu of Marketplace coverage for individuals with incomes up to 200% of FPL who otherwise be eligible for federal Advance Premium Tax Credits (APTCs). i. Currently two states, Minnesota and New York have implemented a BHP. 2. State Premium and Cost Sharing Subsidies – States may build on the federal government’s APTCs and CostSharing Reductions (CSRs) by funding subsidies to lower premiums and / or cost-sharing for Marketplace enrollees. i. Currently five states, California, Colorado, Massachusetts, New Jersey, and Vermont have committed state dollars to provide premium subsidies or premium and cost sharing subsidies for individual market health insurance. 3. Public Option Plan – A government-backed health plan which would compete on the Marketplace with private health plans. The public option may reduce costs through lower administrative costs and / or by paying lower provider prices. i. The state of Washington implemented a public option plan and several other states are considering legislation to create one. 4. Medicaid Buy-In – The state would make Medicaid, or Medicaid-like, coverage available to consumers who are not otherwise eligible. The plan would reduce costs by leveraging a state’s existing Medicaid infrastructure and lower provider reimbursement rates. The targets could be narrow (only those up to 400% of the FPL who are ineligible for federal premium tax credits), or broad (anyone not already eligible for Medicare, Medicaid or CHIP). No state has implemented a Medicaid buy-in program, but it is being studied by several. 5. Transitioning to a State Based Marketplace – Illinois could take over responsibility for operating the Health Insurance Marketplace from the federal government. The state would run the eligibility and enrollment, consumer outreach and assistance, and plan management functions. Several of the above proposed policies would benefit from, if not require the state to transition to a State-based Marketplace. 6. State Supported Marketing and Outreach – The state could increase its investment in outreach, education and enrollment assistance to consumers eligible for Marketplace coverage and / or Medicaid. Milliman was directed to provide a study that showed the impact of four of the six policy options. They were also directed to estimate the state’s cost of funding each program. The study was done reflecting a 7.1%
may 2021
