Progress Illinois

The Illinois Department of Insurance was awarded a $1 million federal grant yesterday to help the state increase its oversight of health insurance premium increases. This is a welcome infusion of resources made available through the federal health reform bill. Over the past two years, state regulators say that some of Illinois' largest health insurance companies have pushed through dozens of steep rate hikes on individual policies. But since the insurance industry is so strong in Springfield, the government still has no explicit authority to review these cases.

Insurance Director Michael McRaith says he will spend the money on staff and technology to beef up his regulatory infrastructure. The department head is also asking the General Assembly for the power to approve or deny health insurance rate increases. (Illinois is one of just 15 states with no rate review authority.) If they don't step up, the state might be forced to turn to the Department of Health and Human Services, whose purview is limited. "While I do think and will continue to think that state oversight of rates is the most appropriate vehicle for rate regulation," McRaith told Politico last month, "our objective is to assure that consumers receive value in exchange for their premium dollars."

Throughout the spring, we reported several times on a key feature of the federal health care reform package: financial support for state-based high-risk insurance pools that cover those who have been blocked from the individual market for at least six months due to chronic illnesses or disabilities. Illinois currently runs two pools, both under the Illinois Comprehensive Health Insurance Plan (ICHIP), that service 16,000 people. The federal legislation that passed in March provided funding to expand those existing programs until 2014, when additional protections for adults with pre-existing conditions are put into place.  But the federal funds depended on the General Assembly making a technical change to the ICHIP statute.

Well, the legislature balked on the governor's measure (SB 240, House Amendment 1), which would have allowed the Department of Insurance to extend coverage early this summer using roughly $200 million in federal resources. As the Sun-Times reported yesterday, the delay means that Illinois Department of Insurance Director Michael McRaith must now find a plan administrator willing to insure the new enrollees (instead of just tossing them into the existing ICHIP pool that uses Blue Cross Blue Shield), a process that could take months to finish.

Once again, dysfunction in Springfield means needy residents must wait for crucial services.