State Opens Enrollment for New High-Risk Health Insurance Pool; CHIP Board Considers Expansion of Existing High Risk Pool

The Illinois Department of Insurance began accepting applications for the state's new federally-funded temporary high-risk health insurance pool today. The new Illinois Pre-Existing Condition Insurance Plan (IPXP) is the product of the federal Patient Protection and Affordable Care Act (PPACA) to serve individuals who have gone without health insurance for 6 months or more due to a pre-existing condition.

Illinois expects to receive $196 million in federal funds to support the new pool that is also funded by premiums paid by IPXP enrollees. Federal funds are only available to support the pool until January 1, 2014, when health insurance companies will no longer be able to deny coverage on the basis of a pre-existing condition.

For more information on the pool and other issues related to healthcare reform, check out the Chamber's new Health Reform Resource Center.

The new federally-funded IPXP joins two other existing state high-risk health insurance pools, one of which is supported by state funds while the other- HIPAA-CHIP- is supported by assessments on health insurers. Both of the state's existing high-risk pools require higher premiums from their enrollees, and all of the 17,000 enrollees in those pools are ineligible for coverage under the new federally-funded pool.

Late in the spring legislative session, the Director of Insurance pushed for a statutory reduction in the HIPAA-CHIP premium calculation to match lower federal premium levels; an effort that would have imposed millions of dollars of new assessments on health insurance companies.

The Illinois Chamber joined a coalition of business and labor groups to defeat the legislative proposal in the spring, not only because it went above and beyond the scope of federal health insurance reform, it also threatened to significantly increase health insurance costs to Illinois employers- the ultimate payers of any new assessments on health insurance companies.

In the absence of legislative approval of the expansion, Director McRaith, as Chairman of the CHIP Board, is pushing for CHIP Board approval of a rate reduction for HIPAA-CHIP enrollees to the statutory minimum of 125% of the average individual rate (the current rate for those enrollees is over 142%). If the Board, which is scheduled to meet on Tuesday, August 24, approves the rate reduction, Illinois employers- particularly smaller employers- would be forced to absorb higher healthcare costs.

The Chamber has already registered its concerns with the Director and the CHIP Board and will be present at Tuesday's meeting to re-enforce those concerns.

The Director and the CHIP Board are not seeking any similar rate reduction for the state GRF-funded Section 7 pool due to the increased financial demands such a reduction would place on the state's already precarious budget situation.