New Illinois Health Insurance Rules Protect Sick People from Drastic Premium Increases

By Margie Stapleton

Springfield, IL – State Gov. Rod Blagojevich ordered the Division of Insurance of the state Department of Financial and Professional Regulation to issue two new administrative rules that will deal with impediments to quality health care faced by Illinois residents who purchase health insurance on the “individual market.” One rule prohibits insurance companies from increasing the health insurance premiums for covered people when they become ill, and the other rule requires health insurance companies to disclose information on premiums and expenses. The announcement was made on July 12, 2007.

The rule regarding premium increases for covered people prevents insurance companies from considering health status when they set premiums on a renewed individual health insurance policy. Instead insurance companies are permitted to consider only demographics and medical cost inflation when they set premiums for renewing individual policies. According to the governor’s office, the new rule protects consumers from being priced out of coverage when they have an illness or injury.

The rule regarding information disclosure requires health insurance companies to report quarterly to the state regulators how much they collect in premiums and how much they spend on health care claims. According to the governor’s office, the new reporting requirements enable the state to gather the information needed to regulate rates more stringently. 

The new rules were issued as the Illinois General Assembly continued to consider Senate Bill 5, the “Illinois Covered” plan, which would make comprehensive, affordable health coverage available to all Illinois residents through the expansion of public health coverage programs and subsidies and reforms of private insurance programs.