Lawmakers send package of health insurance reforms to Gov. J.B. Pritzker’s desk

Health care initiatives pushed by Gov. J.B. Pritzker were passed by the Illinois House Saturday, paving the way for a prohibition on controversial insurance industry practices such as a requirement that patients try treatments that differ from those prescribed by their physicians.

The passage of the legislation, which followed earlier approvals by the state Senate, marks a victory for Pritzker, who in his February budget address vowed to expend political capital to go after insurance practices he criticized as “predatory.” He subsequently toured the state to promote the legislation.

“Today, we celebrate a win for Illinois families and healthcare providers everywhere. We’re saving lives and making the path to care easier for all,” the governor said in a statement Saturday.

After a series of tweaks to the bills, the insurance industry dropped its opposition to legislation on most of the governor’s initiatives, except for a ban on certain short term, high cost insurance plans.

One of the key provisions in the legislation passed by lawmakers would put prohibitions on what is known as step therapy, in which insurers require patients to try a different, often cheaper, alternative before treatment recommended by doctors. The practice has been decried by doctors and patients who say it can delay necessary care, allowing patients’ condition to worsen; the insurance industry has framed it as a cost-saving measure.

In the version that passed in both chambers, the step therapy provisions for prescription drugs apply to medications already covered within insurance plans, Laura Minzer, president of the Illinois Life and Health Insurance Council, said Saturday.

For example, if a doctor wanted a patient to try Ozempic, it could be immediately prescribed if it was already on the list of medications covered by the patient’s insurance.

If Ozempic wasn’t on that list, there would still be an additional process to try to get an exemption, such as for cases where the patient had been on a particular medication successfully for a long time. That process keeps costs down, Minzer said.

The step therapy provision, along with many of the others in the bill, goes into effect in 2026.

The legislation would end up costing $35 million to the state insurance plan and $30 million to Medicaid, according to Democratic Rep. Anna Moeller of Elgin, the bill’s lead sponsor.

Moeller has previously said many of the reforms will lead to long-term cost savings, as well as greater access to care.

The legislation containing the step therapy ban passed 83-23-1 in the House and 45-14 in the Senate, with bipartisan support.

Another one of Pritzker’s initiatives — originally passed as a package with the other provisions but put into a separate bill for the final votes — would ban short-term insurance plans that may be financially risky to consumers. Known as short-term limited duration plans, they offer coverage for a short period but may result in exorbitant costs for treatment. Pritzker has called them “junk plans.”

The plans are “giving people, who are more often than not between jobs, a false sense of security when in fact they are flying without a parachute,” Democratic Rep. Bob Morgan of Deerfield said on the House floor Saturday.

The Illinois Life and Health Insurance Council, which represents some companies that sell the short term plans banned by the legislation, opposed the ban, and the vote for its passage in the House was 72-35, nearly split along partisan lines.

“These plans are not junk plans. There are some that are bare bones. The vast majority of these that are sold are with good and decent limitations that provide value to our Illinois citizens,” Republican Rep. Jeff Keicher of Sycamore said.

The plans can be cheaper than the temporary insurance extension option known as COBRA, he said.

The bill passed Saturday that bans step therapy also would prohibit prior authorization, when patients have to get permission from insurance companies before receiving treatment, for in-patient mental health care.

Other provisions, such as stricter standards for updating directories and posting lists of covered drugs, are intended to improve transparency. The legislation also aimed to address price increases for large group insurance.

“For far too long, insurance companies, not doctors, have determined what treatment options patients should have, and how quickly they can receive it,” Pritzker said in one of several press conferences promoting the legislation in recent weeks. “This bill puts power back in the hands of patients and their doctors.”