The AIDS Foundation of Chicago (AFC) recently made the difficult decision to oppose legislation pending in Springfield that creates a state-run health insurance marketplace. We base this decision on the poor consumer protections in the bill.
House Bill 3227 (Senate Amendment 2) is backed by our partners, including Campaign for Better Health Care (CBHC), and is sponsored by Sen. Dave Koehler (D-Peoria), a long-time friend of AFC and champion for helping people without insurance access health care. Still, we cannot support it.
The Affordable Care Act (ACA) creates online health insurance marketplaces that will allow individuals, families, and small business employees to shop for health coverage. Marketplaces are a central component to the success of ACA state implementation. Plans sold on the marketplace will be available to most people, including people with HIV, regardless of their diagnosis or condition, ending decades of legal discrimination by insurance companies against people with HIV. People earning between about $16,000 and $46,000 will be able to receive subsidies to make premiums and out-of-pocket costs more affordable.
States have the option to operate the marketplace themselves, use a marketplace run by the federal government, or operate a state-federal partnership. In 2014, Illinois will employ the state-federal partnership option and use the federal marketplace as the backbone of its system; however, Illinois will directly operate outreach, enrollment, and other programs. (See the Kaiser Family Foundation's "State Decisions on Health Insurance Exchanges and the Medicaid Expansion" for more information.)
The primary reason AFC opposes HB 3227 is that the Illinois General Assembly and its insurance-industry allies would have heavy control over the marketplace. Here are three examples of why this creates an unhealthy system of oversight: 1) the General Assembly would annually approve the budget for the exchange, even though its operating funds are held outside the state treasury; 2) the General Assembly would control even small details, such as the executive director's salary; and 3) language in the bill limits the exchange's future ability to impose standards that are more rigorous than the minimums established by the federal government.
The insurance industry has tremendous influence in Springfield. Advocates often joke that consumer-friendly insurance reform bills go to the House and Senate Insurance Committees to die. Moreover, the insurance industry makes significant campaign donations to sitting members of the General Assembly, as detailed in this 2011 State Journal Register article.
Giving significant control of the exchange to the General Assembly is akin to letting the fox design, build, stock, and guard the henhouse. If us chickens are to have a meaningful choice of affordable insurance plans that provide high-quality health care, the exchange needs more independence from the General Assembly and by extension, the insurance industry.
We favor an independent marketplace board of directors that includes strong consumer and small business members, not insurance industry representatives. A board with these standards and statewide representation will be vested in making the best decisions for Illinois health insurance consumers.
HB 3227 passed the Senate Insurance Committee May 9 by a vote of eight to five. Tellingly, the Illinois Governor's Office position was "neutral," meaning they neither supported nor opposed the bill. The bill awaits a vote in the full Senate, and then must proceed to the House. It's too soon to predict if the measure will advance in the House by the end of the session on May 31.
Meanwhile, the marketplace, run by the state-federal government, will begin enrolling Illinoisans beginning Oct. 1, 2013, for coverage starting Jan. 1, 2014.
If HB 3227 does become law, AFC will work to influence regulations to favor consumers, and of course, we will advocate in future General Assembly sessions to improve the law for people with HIV, as well as other vulnerable populations.
John Peller is vice president of policy at AIDS Foundation of Chicago.
