Illinois legislature passes bill to move to state-based exchange, joining 20 other states


I wrote about Illinois House Bill 579 back in March:

...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.

From the legislative text itself:


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 This Section is repealed 3 years after the effective date of this amendatory Act of the 103rd General Assembly.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 user fee structure is a bit surprising...

...(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.

...because 2.75% of premiums is actually higher than the proposed user fee for the federal exchange next year (it's being dropped from 2.75% to just 2.2%). Ironically, one of the main reasons several other states shifted from the federal exchange to their own platform was to reduce the user fees, but has hacked theirs down considerably over the past few years, significantly reducing the upside of making the move.

Regardless, Illinois seems to still think the benefits outweigh the drawbacks.

In any event, as of last week, both the Illinois state House and Senate have passed HB579, so now it's on to Gov. Pritzker's desk for signing; after that I think it just has to be signed off on by the Centers for Medicare & Medicaid Services. As noted above, Illinois would officially be designated a "FF-SBM" for 2025 (federally facilitated state-based marketplace, which means it would still be hosted on HealthCare.Gov for one year before moving to its own full SBM platform for 2026):

Illinois will take a big step forward by creating a state-based health insurance marketplace and instituting a rate review process to protect people from insurance rate hikes.

House Bill 579 could help Illinois become the 19th state to create a state-based health benefits exchange. Sponsors said this would allow Illinois to expand healthcare access by identifying uninsured communities, having effective outreach for residents, and helping people enroll in plans best suited for them.

The bold-faced bit above is incorrect--there are currently 18 state-based ACA exchanges, but both Virginia and Georgia are on track to launch their own SBMs this fall, so Illinois would become the 21st state to do so...although other states like Texas are also likely moving to SBMs in the next few years as well, so there could be one or more doing so in 2026.