Illinois Governor J.B. Pritzker signed new measures into law on Wednesday aimed at preventing insurance companies from using tactics that shortchange consumers on their medical needs for profit.
The Democrat Governor’s newly signed Healthcare Protection Act codifies key initiatives from last spring’s legislative session, specifically targeting practices like step therapy, prior authorization for mental health crises, and the sale of junk insurance.
Speaking at a Rush University System for Health facility in Chicago, Pritzker emphasized that the law aims to return control of medical decisions to patients and their doctors. “For too long, insurance companies have used predatory tactics to make an extra dime at the expense of Illinois consumers,” Pritzker said. “Patients have faced delays or denials of medically necessary treatments due to profit-driven utilization management practices.”
The law, parts of which will take effect on January 1, 2025, and others a year later, bans step therapy. Also known as “fail first,” this practice forces patients to try less expensive treatments before insurance will cover more costly, physician-recommended options.
“Coverage doesn’t always equal care — until today,” said Bill Smith, founder and CEO of Inseparable, a nonprofit mental health advocacy group. “This law is for you if you or your loved ones have ever struggled to get the right medication to treat mental illness and been told by your insurance company that you must fail first with the wrong drugs.”
The legislation was created with input from medical professionals about the obstacles they face in providing effective care, according to Pritzker’s office.
The new laws also ban pre-authorization requirements for inpatient mental health emergencies and prohibit junk insurance policies that offer limited coverage or lack consumer protections. Insurance plans must now comply with federal Affordable Care Act standards.
“Many of these junk plans do not cover behavioral health, pre-existing conditions, or hospitalization,” said Democratic Rep. Bob Morgan, one of the bill’s sponsors. “What kind of health plan doesn’t cover hospitalization? A plan that is not a plan at all.”
A rule issued last spring by the Biden administration shortens the length of short-term insurance plans and their renewal periods, and mandates that insurers disclose their plans’ limitations.
Under the new laws, insurers must clearly explain prior authorization requirements in their advertising. The laws also set standards for the numbers of network doctors and their appointment availability to ensure patients can access care quickly.
Last year, lawmakers and Pritzker imposed restrictions on unfair rate increases for individual policyholders under employers. The new laws extend those regulations to large group insurers as well.
