Illinois takes slow approach on health exchange

Lawmakers in President Barack Obama's home state have opted for the slow approach to establishing an insurance marketplace that's key to the president's health care overhaul.

The Illinois Legislature during its just-finished session formed a bipartisan committee to study how an insurance exchange should be set up, taking a step back from a detailed plan that evolved from a task force formed by Gov. Pat Quinn.

Insurance exchanges will allow people and small businesses to comparison shop online for insurance starting in 2014. The concept has been described as Travelocity for health insurance.

While Illinois joined a handful of states passing legislation to set up insurance exchanges, the bill that passed last week won out over a proposal for a more ambitious approach. That bill died without coming to a vote, along with another bill that would have given state regulators power to deny health insurance rate increases.

Consumer advocates are dismayed.

"There were months of stakeholder meetings and expert testimony to draft policy prior to the session so Illinois could start addressing rising health care costs now rather than later," said Brian Imus of the Illinois Public Interest Research Group. "Unfortunately lawmakers decided to wait until later."

The winning bill's main sponsor, Rep. Frank Mautino, a Spring Valley Democrat, said many legislators wanted a conservative approach "to a program that was not fully evolved by the federal government." Other lawmakers in both parties didn't want exchange legislation at all, he said.

Mautino's bill sets up a bipartisan study committee, made up of legislators, which must issue a report by Sept. 30. That would be enough time to introduce a more detailed bill in the fall veto session, Mautino said.

The governor's office isn't commenting on whether he will sign the legislation. Quinn spokeswoman Brie Callahan said the state got an early start on implementing the national health law "to allow time for the kinks to be worked out." She said the Quinn administration will keep working toward insurance rate review and implementation of the health care law.

"We intend to implement the Affordable Care Act so that our families and employers have appropriate health care options and much-needed financial security," Callahan said.

Fifteen states, including Illinois, have passed legislation in support of health insurance exchanges, according to the nonpartisan Center on Budget and Policy Priorities. In states that don't set up their own exchange, the federal government will do so. Only Louisiana has announced it will not set up its own exchange.

The exchanges, a key component of Obama's health law, will allow people and small businesses to shop online for insurance starting in 2014. They're meant to create more competition and reduce administrative costs as they offer one-stop shopping for health coverage.

Most people buying insurance through the exchanges would be eligible for taxpayer-financed subsidies, and the exchanges will help people who qualify enroll in Medicaid. Participating insurance plans would have to take all applicants, regardless of prior health problems.

In Illinois, consumer advocates lobbied to change language in Mautino's bill that limited exchange participation to small business with fewer than 50 employees. Twenty-two groups signed a letter to lawmakers urging the opening of the exchange to businesses with up to 100 employees, giving small businesses more market leverage.

"There's no reason for the state of Illinois to suddenly make decision to weaken the power of small businesses," Imus said.

Consumer advocate Jim Duffett of the Campaign for Better Health Care said the successful bill was "written by the insurance industry," a charge Mautino denied. Insurance groups were among the many groups and state agencies that "had language they put into the bill," Mautino said.

"It was written, in effect, by me, but after having input" from many sources, Mautino said.

Sen. Dave Koehler, a Peoria Democrat, sponsored the more ambitious bill, which would have established a governing board, with representation from consumers, to run the insurance exchange.

"My bill set it up in a way that consumer voices would be on this panel," Koehler said. "As it is, you have a group of legislators who will decide and it will be more political. My fear is it won't go far enough" to help consumers and small businesses, he said.