New Illinois health insurance proposal would ban 'junk insurance' and 'step therapy'

The Illinois governor is looking to tackle the rising cost of health insurance.

The Healthcare Protection Act (HPA) seeks to prohibit step therapy, eliminate prior authorization for crisis mental health care, enhance network adequacy and curb unchecked rate hikes for large group insurance companies.

"Illinoisans who are suffering should not have to jump over hurdle after hurdle to get the care they need to survive," said Gov. J.B. Pritzker. "The only people who should be making decisions about patient care are doctors and patients themselves — not an insurance employee with no medical background."

The HPA focuses on utilization management, which is a practice that frequently requires consumers to seek approval from their providers before receiving care that physicians have already deemed essential. Pritzker says this practice enhances profits for insurance companies and creates obstacles to care for patients and their physicians. 

Additionally, utilization management encompasses "step therapy," a process that mandates patients to undergo less effective treatment options before accessing the originally recommended treatment. In Illinois, the HPA will ban "step therapy" and require insurance companies to align their definitions of medical necessity with those determined by doctors.

The HPA also tackles the issue of prior authorization. Illinois is poised to become the first state in the nation to prohibit prior authorization for inpatient adult and pediatric mental health care. This measure ensures that individuals in crisis can promptly access necessary care to safeguard their well-being and that of others, without the need for approval from insurance providers.

Additionally, the HPA mandates that all insurance companies disclose treatments requiring prior authorization, facilitating consumers' ability to compare plans when seeking coverage. Short Term Limited Duration insurance plans, often labeled as "junk insurance," will also be barred. These plans are not bound by key provisions of the Affordable Care Act, such as coverage for preexisting conditions.

The second component of the Healthcare Protection Act focuses on enhancing network adequacy and transparency standards. Insurance companies will face heightened scrutiny in updating their in-network care directories to accurately reflect availability. This includes indicating whether doctors and specialists can accept new patients and removing those no longer in-network or practicing.

The HPA's final initiative targets the elimination of unchecked rate increases in fully insured large-group insurance carriers.