Gov. J.B. Pritzker’s administration says insurance bill is an effort to balance needs of companies, consumers

Gov. J.B. Pritzker’s administration pitched the details of his sweeping health insurance reform plan to a state House committee Wednesday as he countered claims that it could increase costs for consumers.

Legislation for implementing the governor’s plan, which is intended to protect consumers from insurance practices that critics say delay or restrict access to necessary care, already has the support of many Democrats and at least one Republican. A committee vote could come as soon as next week, Elgin Democratic Rep. Anna Moeller, chair of the Human Services committee and the bill’s top House sponsor, said during Wednesday’s initial hearing.

Pritzker and his legislative allies are aiming to overhaul a broad range of insurance companies’ practices. Among other things, the bill would ban so-called step therapy, in which insurers require patients to try a different, often cheaper, alternative before treatment recommended by doctors. It also would ban prior authorization, when patients sometimes have to get permission from insurance companies before receiving treatment, for in-patient mental health care.

“I know the insurance companies will fight us on this. But I’m not willing to play political games with the health of Illinois families,” the governor said Wednesday at a separate appearance in Springfield.

Representatives for insurance companies and their partners said during Wednesday’s hearing that they were broadly willing to change some of the practices laid out in the legislation. But they said some of the provisions were unnecessary or could result in higher costs to consumers.

Pritzker pushed back on the idea that the legislation could hurt patients’ wallets.

“Nobody’s getting rid of broad cost controls here. That’s not what this is about,” he said.

Other opponents argued the legislation doesn’t go far enough to protect low-income patients who have Medicaid, rather than private insurance.

Emily Miller, a senior adviser to the governor, told the committee that the bill is intended to balance the needs of insurance companies and consumers.

“The industry has a voice that has been well-heard over the years,” Miller told lawmakers. She acknowledged that “interrupting” the way insurance companies do business will have costs, but said the effort was more focused on the costs of care for families.

Other provisions, such as stricter standards for updating directories, are intended to improve transparency about which doctors are in-network for consumers. The legislation would also aim to address price increases for large group insurance, expanding to larger employers some of the protections provided in a law Pritzker signed last year covering small businesses and individuals.

Additionally, it would ban short-term insurance plans that may be financially risky to consumers. So-called short-term limited duration plans, which the governor has referred to as “junk” plans, offer coverage for a short period but may result in high costs for treatment, witnesses said Wednesday.

Laura Minzer, president of the Illinois Life & Health Insurance Council, said in an interview after she testified before the committee Wednesday that she’d prefer to see transparency requirements on those plans rather than a ban.

She also said eliminating step treatment could raise costs, because alternative prescription drugs proposed by insurance companies often cost less than treatment initially recommended by doctors.

Lori Reimers, testifying on behalf of an association representing prescription drug-price negotiators known as pharmacy benefit managers, said step therapy isn’t meant to be an “inconvenient or manipulative tactic.”

“These guidelines are not made up just for the sake of price,” Reimers, representing the Pharmaceutical Care Management Association, said.

Among nearly a dozen witnesses who testified in favor of the legislation on Wednesday, several shared personal stories involving themselves or their patients who had been harmed by insurance practices that would be restricted under the new bill.

The legislation “literally addresses life-and-death matters,” said Dr. Mary Dobbins, of the Illinois Chapter of the American Academy of Pediatrics.

State Sen. Patrick Joyce, a Democrat based in Essex, spoke at the hearing to share personal experiences trying to get treatment for severe health problems for both of his children.

Joyce’s son was born with a rare condition that required open heart surgery multiple times, including as a toddler, Joyce said.

Years later, he said, when he believed his family was past tough times, his daughter was diagnosed with leukemia. Joyce lost his daughter, Katelyn, in 2011. During his daughter’s time in the hospital, Joyce said his family faced battles with insurance companies, including getting access to a nausea medication that the family knew would be effective.

“Our fight kept her morale up,” Joyce said. “We stayed strong, but we were divided in what we had to do, between getting her medications and keeping her morale up.”

“Who advocates for Illinoisans? Who’s out there if you’re out by yourself, if you don’t have the family and friends? This legislation helps,” Joyce said.

Pritzker’s pointed focus on insurance reform this session caught many in Springfield by surprise. In his budget address last month, the governor promised to spend significant political capital on legislation preventing companies from dictating treatment decisions.

“There should never be an instance where an insurance company employee can deny coverage for something as serious as open heart surgery,” Pritzker said at the time.

Minzer, recently appointed by Pritzker to a state committee on health benefits, said she was troubled by the governor’s negative characterization of the insurance industry, especially at a time when the industry is already working with the state to implement other health care laws passed in recent years.

“Is there friction between all of these groups? One hundred percent. You’re going to have that in health care,” Minzer said. Still, she added, saying the industry is problematic overall is “a very broad, sweeping and erroneous statement.”