Pritzker signs law banning health insurance companies’ ‘predatory tactics,’ including step therapy

SPRINGFIELD, Ill. (AP) — Illinois Gov. J.B. Pritzker on Wednesday signed into law measures to block what he called insurance companies’ “predatory tactics to make an extra dime” by shortchanging consumers on their medical needs.

The Democrat signed legislation codifying one of his top initiatives of last spring’s legislation session, the Healthcare Protection Act, which outlaws step therapy, prior authorization for mental health crises and junk insurance.

At a Rush University System for Health facility in Chicago, Pritzker said the law is aimed at “empowering” patients and their doctors by “putting medical decisions back in their hands.”

“For too long, insurance companies have used predatory tactics to make an extra dime at the expense of Illinois consumers,” Pritzker said. “For too long, patients have (been) delayed or been denied medically necessary treatments because of profit-driver utilization management practices.”

The laws, parts of which take effect on Jan. 1, 2025 and others a year later, ban so-called step therapy, also known as “fail first.” The managed-care practice requires patients to use more cost-effective treatments first before allowing a more expensive option even if that is the physician-recommended course.

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“Coverage doesn’t always equal care — until today,” said Bill Smith, founder and CEO of the nonprofit mental health advocacy group, Inseparable. “This law is for you if you or your loved ones have ever struggled to get the right medication to treat mental illness and have been told by your insurance company that you have to fail first with the wrong drugs before getting the treatment, that you need.”

The legislation was drawn up after consulting medical professionals on the roadblocks they face to providing effective care, according to Pritzker’s office.

Pre-authorization requirements for in-patient mental health emergencies is banned under the laws, as well as so-called junk insurance, policies that offer limited coverage or lack consumer protections. Insurance plans now must meet federal Affordable Care Act standards.

“It may be cheaper than being fully insured, but many of these junk plans do not cover behavioral health. They do not cover pre-existing conditions. They may not even cover hospitalization,” said one of sponsors of the legislation, Democratic Rep. Bob Morgan. “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 such short-term insurance plans and their renewal periods and mandates that insurers provide information on their plans’ limitations.

Insurers must clearly explain prior authorization requirements in their advertising under the laws. And when in-network professionals must be used, the laws set standards for the numbers of network doctors and their appointment availability so that patients can quickly access care.

Last year, lawmakers and Pritzker put restrictions on unfair rate increases for individual policyholders under employers. The new laws extend that regulation to large group insurers too.