Illinois Health Exchange Profile
Establishing the Exchange
While Governor Pat Quinn (D) had considered establishing an exchange via executive order, he began moving in the direction of a state-federal partnership exchange in July 2012. The Governor’s staff noted it would be difficult to meet the federal timetable for implementation. While the state is pursuing a partnership exchange, the administration still intends to transition to a fully state-based exchange in 2015 and will continue with the necessary planning. A state opting for a partnership exchange can choose to operate plan management functions, consumer assistance functions, or both. The state can also elect to perform Medicaid and CHIP eligibility determinations or rely on the federal government to make those determinations.
In 2011, the Governor signed SB 1555 into law declaring the state’s intent to establish the Illinois Health Benefits Exchange and created the Health Benefits Exchange Legislative Study Committee. Legislation establishing a state-based health insurance exchange remains pending (HB 4574, SB 1729, SB 1313).
The bipartisan Health Benefits Exchange Legislative Study Committee, composed of six appointed legislators from each chamber, completed a draft report in October 2011, which did not make specific exchange recommendations, but drew largely from reports commissioned by the Governor’s Health Reform Implementation Council. Released the month prior, the Health Reform Implementation Council reports analyzed the state’s insurance coverage, health insurance marketplace, and infrastructure needs associated with an exchange. Various stakeholder groups commented on the bipartisan Study Committee’s exchange report.
Contracting with Plans: The state intends to pursue plan management functions in the partnership exchange. In December 2011, Illinois hired a subcontractor to propose a process for qualified health plan (QHP) certification, recertification, and decertification. The Department of Insurance also solicited input from carriers on the implementation of QHP standards. The state is awaiting further guidance from U.S. Department of Health and Human Services (HHS) before developing a quality rating system for QHPs.
Risk Adjustment, Reinsurance, and Risk Corridors (RRR): The Department of Insurance hired subcontractors in December 2011 to evaluate options for the state’s RRR programs. The final report will provide the state with a comprehensive work plan for the implementation of risk adjustment mechanisms. Based on preliminary results, the state has decided to defer to the federal risk adjustment program for 2014 (also a necessity for state-federal partnership exchanges); however the state is evaluating its capacity to run reinsurance at the state level in 2014.
Consumer Assistance and Outreach: A final subcontractor’s report on design of the state’s Navigator program was released in June 2012 to the Department of Insurance. Recommendations included adding expertise in Medicaid eligibility and enrollment to the Navigators’ responsibilities, allowing the Department of Insurance to maintain responsibility for the program until a state-based exchange entity is created, and restricting Navigator participation to organizations. This would prohibit Navigator participation by individuals with the exception of medical providers and insurance producers. The report also recommends the state use a competitive process to select Navigators and that for the initial phase of the program, Navigators serve consumers in the individual exchange but not the small-business exchange- in which producers would assist employers to purchase coverage for their employees.
Illinois plans to procure a multi-tier call center to manage and respond to all Exchange inquiries. The state anticipates that call center staff will be trained at various levels, ranging from simple questions to complicated lifestyle or medical needs questions.
Small Business Health Options Program (SHOP) Exchange: In December 2011, the state hired subcontractors to assist with SHOP-specific functions and anticipates deliverables including possible SHOP models and a work plan for the development of a SHOP Exchange by Spring 2012. The state also conducted a survey with potential users of the SHOP Exchange to identify market conditions and services and features important to potential users.
Information Technology (IT): While Illinois will initially pursue a partnership exchange, the state intends to continue developing IT capacity for a transition to a fully state-based exchange in 2015. Illinois envisions two phases for technical infrastructure implementation. The state will build a front end portal to determine eligibility for Medicaid and the Exchange which will have connections to the Federal Hub. The second phase will replace the state’s underlying eligibility system. The Eligibility Modernization Oversight Group, an intergovernmental working group formed to address eligibility, verification, and enrollment requirements, continues to meet weekly to develop an Integrated Eligibility System (IES). Subcontractors have been hired to begin the necessary work. Additionally, key staff has been recruited to guide the IES and exchange operating systems development. Federal grant money awarded in May 2012 is being used to hire an exchange systems integration vendor, IES project management office staff, and an IES vendor. The Department of Healthcare and Family Services released a Request for Proposals for Independent Verification and Validation (IV&V) services for the IES and the exchange. A separate interagency team has been heavily involved in the “Enroll UX 2014” project, which is a public-private partnership creating design standards for exchanges that all states can use.
Essential Health Benefits (EHB): The Affordable Care Act (ACA) requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. States must decide whether to benchmark their EHB plan to one of ten plans operating in the state or default to the largest small-group plan in the state. The Illinois Health Care Reform Implementation Council accepted public comments and planrecommended the BlueCross BlueShield of Illinois BlueAdvantage small group plan supplemented by the federal BlueVision package and the AllKids dental package as the benchmark package.
In September 2010, the Illinois Department of Insurance received a federal Exchange Planning grant of $1 million. The Department has also received two federal Level One Establishment grants-one for $5.1 million awarded in August 2011 and a second for $32.8 million in May 2012. The grants will be used to conduct research on risk adjustment, reinsurance, the navigator program, the certification of QHPs, and the SHOP exchange as well as to build the Governor’s health reform website. The state will use the majority of the funds to support the design, building, establishment, and maintenance of the IT systems required for the exchange. Funds will also be used to set up a design management team, continue the development of a consumer assistance portal, and continue the development of a Navigator education and training program.
On February 13, 2013, Illinois received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a partnership exchange. The state intends to pursue both plan management and consumer assistance functions. Final approval is contingent upon the state demonstrating its ability to perform all required exchange activities on time; complying with future guidance and regulations; signing a memorandum of understanding (MOU) with CMS outlining the roles and responsibilities for the state’s operation of plan management and consumer assistance functions; and signing an MOU with Illinois’ Medicaid agency to define the roles, responsibilities, and coordinated work shared by both agencies until an exchange entity is created. The state must also retain a vendor to complete required Independent Verification and Validation activities for the exchange and procure vendor services by February 28, 2013 if it wishes to customize its System for Electronic Rate and Form Filing (SERFF) platform to assure operability with the Federally-Facilitated Exchange.
Illinois is also continuing its planning efforts to transition to a fully state-based exchange in 2015. In January 2013, the Health Care Reform Implementation Council released a survey, available to the public through the Illinois health care reform website, to seek stakeholder input on the functions of a state-based exchange. The survey asks respondents to prioritize functions meant to ensure that premiums are affordable, such as selective contracting, expanding on federally required certification criteria, piloting new delivery system and reimbursement strategies, and rate review.
For more information on Illinois’ health insurance exchange planning, visit: http://www.insurance.illinois.gov/hiric/hie.asp