State-run health insurance exchange passes Illinois House committee

SPRINGFIELD — Should Illinois create a state-run health insurance exchange for the Affordable Care Act with a looming U.S. Supreme Court hearing that could jeopardize federal subsidies? That’s a question that will be further debated on the floor of the Illinois House after the measure passed a house committee.

Supporters of a state-based exchange say that they want to set up an exchange before the end of the year to ensure access to federal subsidies. Adding to the uncertainty of federal subsidies for health insurance is the U.S. Supreme Court agreeing to take up a case challenging the subsidies for states that do not have a state based exchange.

Illinois currently has a partnered exchange. Critics say a state-run exchange would be pricey with estimates into the tens of millions of dollars a year. Representative Robyn Gabel said she plans on bringing amendments to the bill when it hits the house floor, which could be this week or during a possible session in January. If passed the exchange would be ready for open enrollment by fall next year.

If Illinois moves forward with a state-based health insurance exchange for the Affordable Care Act, it could cost more than $170 million in just three years. During a house hearing on a measure to create a state-based exchange Sarah Myerscough-Mueller with Governor Quinn’s office says the costs will be tens of millions of dollars a year.

“The first year it would be around $72.5 million and then year two would be $50 million,” she said. “So how they broke that out, it would be roughly $50 million thereafter due to updates for IT, obviously consumer assistance stuff would exist but would be pared down over the years.”

Myerscough-Mueller says as the years go on there wouldn’t be a need for a high number of navigators. Funding for the tens of million dollars a year would come from a three-point-five percent assessment on policies. A measure creating a state-based exchanged passed committee and could be amended before a full vote on the house floor.

A state-run health insurance exchange could cost Illinois upwards $170,000 in the first three years, if it passes the legislature. The measure that passed a house committee Monday allows for a 3.5 percent assessment on insurance plans to pay for the exchange.

During a house hearing Monday State Representative Norine Hammond asked Representative Robyn Gabel if the three-point-five percent of health insurance costs to pay for the program could rise with the federal rate. Gabel said the law would cap that, but there are ways around expected increased costs.

“So, and there may be some advocates that aren’t thrilled about this, but a big section of the money would go to marketing, so there would just be a little less marketing,” Gabel said.

Gabel says if the cap of 3.5 percent doesn’t generate enough money to run the state-based exchange lawmakers could come back with a new bill to raise more revenue. The proposed exchange passed a house committee Monday and could be amended further on the house floor in the remaining session of the General Assembly.