“As Illinois and other states rush to implement federal health insurance reforms, consumer advocates say lawmakers shouldn’t allow insurers to make all the decisions.
Illinois must create a board to oversee the state’s federally-mandated public health insurance exchange by late June if the state wants to access hundreds of millions in federal funds, says Jim Duffett, executive director of the Illinois-based Campaign for Better Healthcare. But Duffett warns that filling the governing board with insurance providers would mean expensive and restrictive choices for consumers.
“If you can’t regulate and negotiate with the insurers, they’re going to be able to charge whatever they want and be able to dictate the terms,” Duffett says.
The idea of public health insurance exchanges comes from the federal Affordable Care Act, which became law in 2010. Among other provisions, the law gives states the option of creating a marketplace offering state-approved insurance plans as a way to provide affordable health insurance to those who currently can’t afford it or can’t obtain insurance because of existing medical conditions.
Duffett wants the governing board that oversees Illinois’ public exchange to include health experts, consumers, small business representatives, and possibly a representative from the office of the Illinois attorney general. Duffett says insurance providers have no place on the board. He likens the board to a jury, with insurers being attorneys who must convince the jury.
“We want a board that is racially, geographically, culturally diverse,” Duffett says. “We think by having a board like this, it will bring balance. Needless to say, there’s not a consumer lobby that has as many political contributions and as much influence as the insurance industry.”
Duffett says the insurance industry in Illinois will have about 1.2 million new customers once the public exchange is fully implemented. If Illinois doesn’t create its own public exchange, consumers here will have to look to whatever public exchange the federal government designs, Duffett says.
Meanwhile, insurers have told the Illinois Health Care Reform Implementation Council, created by Gov. Pat Quinn to oversee federal reforms, that they should have a seat on the board to ensure the public exchange is competitive yet still viable for private insurers.
“We … believe residents and business of Illinois would be best served by a governing body with representation from all stakeholders – consumers, agents and brokers, business, insurance, health care providers and regulators,” said Jeffrey Ingrum, president and CEO of Urbana-based Health Alliance insurance company, in written comments submitted to the council.
Other insurance companies, such as Lake Forest, Ill.-based Trustmark Insurance and Chicago-based UnitedHealth Group of Illinois, offered similar opinions to the council. BlueCross BlueShield of Illinois, the state’s largest insurer with more than seven million members, advocated for a board that “ensures protection from political influence and has knowledge of insurance markets and fiduciary accountability.”
The council issued initial recommendations to Quinn in January 2011, urging the board to be created as a “quasi-governmental entity.” The report seems to indicate a willingness to consider insurers for membership on the governing board.
“(This option) is more independent from political influence than an Exchange established within an existing state government entity, and can be far more nimble in staffing, procurement and operations,” the council said in its report. “By offering more competitive compensation, a quasi-governmental entity would be able to attract individuals with extensive experience both in the public and private sector, ensuring business savvy. Even with such independence, a quasi-governmental entity maintains a significant tie to the state, making it more accountable to the people and policymakers of Illinois than an independent nonprofit would be.”
Duffett says Quinn could establish the board and determine its makeup himself through an executive order.
Brie Callahan, a spokeswoman for Quinn, seemed to indicate Quinn would wait to see what the legislature does. Callahan could not be reached for clarification.
“The board will be established by the legislation that creates the exchange,” Callahan said. “What the board looks like, etcetera, will be part of the legislation, too.”