Illinois wants to jump on the state-based exchange bandwagon

I had heard that this was in the works, and with the recent trend of more & more states (most recently including Georgia) splitting off from the Federally Facilitated Marketplace (FFM) hosted via HealthCare.Gov, it's hardly surprising...but it's still a pretty big deal, especially given that Illinois is the 6th largest U.S. state by population. Via Amy Lotven of Inside Health Policy:

Illinois’ Department of Insurance would be authorized to operate a state-based exchange, starting in plan year 2026, under legislation introduced late Thursday by the Illinois Democratic House Majority Leader Robyn Gabel. Sources earlier this week told IHP they had heard state officials were working with lawmakers on exchange legislation and the bill could be unveiled by this week.

The bill itself, IL HB0579, seems to have an interesting history--it appears to technically be categorized as an amendment to the state's Hospice Program Licensing Act (?), and was originally introduced back in December by Rep. Emanuel "Chris" Welch. Yesterday, however, the amendment to the bill was added into the mix, and the chief sponsor was changed to House Majority Leader Gabel. Huh.

In any event, here's the legislative text itself:

AMENDMENT TO HOUSE BILL 579

AMENDMENT NO. ______. Amend House Bill 579 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Administrative Procedure Act is amended by adding Section 5-45.35 as follows:

Sec. 5-45.35. Emergency rulemaking; Illinois Health Benefits Exchange Law. To provide for the expeditious and timely implementation of Section 5-23 of the Illinois Health Benefits Exchange Law, emergency rules implementing Section 5-23 of the Illinois Health Benefits Exchange Law may be adopted in accordance with Section 5-45 of this Act by the Department of Insurance and the Department of Healthcare and Family Services. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

 This Section is repealed 3 years after the effective date of this amendatory Act of the 103rd General Assembly.

Section 10. The Illinois Health Benefits Exchange Law is amended by changing Section 5-5 and by adding Sections 5-21, 5-22, and 5-23 as follows:

Sec. 5-5. State health benefits exchange. It is declared that this State, beginning October 1, 2013, in accordance with Section 1311 of the federal Patient Protection and Affordable Care Act, shall establish a State health benefits exchange to be known as the Illinois Health Benefits Exchange in order to help individuals and small employers with no more than 50 employees shop for, select, and enroll in qualified, affordable private health plans that fit their needs at competitive prices. The Exchange shall separate coverage pools for individuals and small employers and shall supplement and not supplant any existing private health insurance market for individuals and small employers. The Department of Insurance shall operate the Illinois Health Benefits Exchange as a State-based exchange using the federal platform by plan year 2025 and as a State-based exchange by plan year 2026.

The Director of Insurance may require that all plans in the individual and small group markets, other than grandfathered health plans, be made available for comparison on the Illinois Health Benefits Exchange, but may not require that all plans in the individual and small group markets be purchased exclusively on the Illinois Health Benefits Exchange. The Director of Insurance may require that plans offered on the exchange conform with standardized plan designs that provide for standardized cost sharing for covered health services.

Except when it is inconsistent with State law, the Department of Insurance may enforce the coverage requirements under the federal Patient Protection and Affordable Care Act that apply to the individual and small group markets. The Director of Insurance may elect to add a small business health options program to the Illinois Health Benefits Exchange to help small employers enroll their employees in qualified health plans in the small group market. The General Assembly shall appropriate funds to establish the Illinois Health Benefits Exchange. (Source: P.A. 97-142, eff. 7-14-11.)

Sec. 5-21. Monthly assessments.

(a) The Director of Insurance may apply a monthly assessment to each health benefits plan sold on the Illinois Health Benefits Exchange. The assessment shall be paid by the issuer and to the Department of Insurance and shall be used only for the purpose of supporting the exchange through exchange operations, outreach, enrollment, and other means of supporting the exchange, including any efforts that may increase market stabilization and that may result in a net benefit to policyholders. The assessment may be applied at a rate of:

(1) 0.5% of the total monthly premium charged by an issuer for each health benefits plan during any period that the State is on a State-based exchange using the federal platform; or

(2) 2.75% of the total monthly premium charged by an issuer for each health benefits plan during any period that the State is on the State-based exchange. The Director of Insurance may adjust this rate to ensure that the Illinois Health Benefits Exchange is fully funded.

(b) The Director of Insurance shall notify an issuer of its assessment rate for the subsequent year. Issuers must remit the assessment due in monthly installments to the Department of Insurance.

(c) The assessment described in this Section shall be considered a special purpose obligation and may not be applied by issuers to vary premium rates at the plan level.

(d) There is created a revolving fund to be known as the Illinois Health Benefits Exchange Fund, to be held by the Department of Insurance. The Illinois Health Benefits Exchange Fund shall be the repository for moneys collected pursuant to fees or assessments on exchange issuers, federal financial participation as appropriate, and other moneys received as grants or otherwise appropriated for the purposes of supporting health insurance outreach, enrollment efforts, and plan management operations through an exchange. All moneys in the Fund shall be used only for the purpose of supporting the exchange through exchange operations, outreach, enrollment, and other means of supporting the exchange, including any efforts that may increase market stabilization and that may result in a net benefit to policyholders.

Sec. 5-22. State medical assistance program coordination.

(a) The Department of Insurance and the Department of Healthcare and Family Services shall coordinate the operations of the exchange with the operations of State medical assistance programs. The Department of Healthcare and Family Services shall oversee and operate the exchange eligibility rules engine to ensure accurate assessments and determinations of exchange and State medical assistance program eligibility.

(b) The exchange may determine eligibility for State medical assistance programs that use the modified adjusted gross income methodology.

 (c) The exchange may be used for enrollment into State medical assistance program health plans.

(d) The Department of Healthcare and Family Services may request federal financial participation funds from the Centers for Medicare and Medicaid Services for any integrated eligibility and enrollment functions of the exchange.

Sec. 5-23. Department of Insurance and Department of Healthcare and Family Services authority.

(a) The Department of Insurance and the Department of Healthcare and Family Services, in addition to the powers granted under the Illinois Insurance Code and the Illinois Public Aid Code, have the power necessary to establish and operate the Illinois Health Benefits Exchange, including, but not limited to, the authority to:

(1) adopt rules deemed necessary by the departments to implement this Law;

(2) employ or retain sufficient personnel to provide administration, staffing, and necessary related support required to adequately discharge the duties described in this Law from funds held in the Illinois Health Benefits Exchange Fund;

(3) procure services, including a call center, and goods for the purpose of establishing the Illinois Health Benefits Exchange as emergency purchases as set forth in Section 20-30 of the Illinois Procurement Code; and

(4) require any exchange vendor to have experience operating a State-based exchange in another state.

(b) The Department of Insurance has the authority to employ a Chief Operating Officer of the Illinois Health Benefits Exchange. The Chief Operating Officer shall be subject to confirmation by the Senate.

Section 99. Effective date. This Act takes effect upon becoming law.".