Durbin: Blue Cross could be more competitive, reduce costs

U.S. Sen. Dick Durbin is taking the rare step of weighing in on the Illinois’ handling of a hefty health insurance rate increase request, asking state regulators to press the state’s leading insurer of families and small businesses to reduce costs and be more competitive.

Blue Cross Blue Shield has proposed increases for 2017 ranging from 23 percent to 45 percent for individual health plans sold on the Affordable Care Act insurance exchange. The Illinois Department of Insurance, which has until Aug. 23 to review the proposed rates, can’t reject them outright but can negotiate.

The request prompted Durbin — the Senate’s second-highest-ranking Democrat and a vocal supporter of the health care law — to issue a sharply worded statement. It gave a peek into federal involvement in Illinois’ insurance market and put pressure on Republican Gov. Bruce Rauner’s administration to show that it’s protecting consumer interests.

Durbin, the state’s senior senator, has been mentioned as a possible candidate for governor in 2018. He has said he’s focused on the November presidential election and will decide after that whether to seek the office.

“The Illinois Department of Insurance is now reviewing the Blues initial big number request for a rate increase,” Durbin said in a statement last week. “I trust that the Illinois Department will hold BCBS to an honest standard which requires reform of their practices reflecting the new health care marketplace, professional management of their company, and a sensitivity to the costs to be borne by businesses and consumers in our state.”

Department of Insurance spokesman Michael Batkins said the agency is “working vigorously on behalf of consumers in order to maintain a competitive choice in the marketplace and ensure consumers are protected.”

While many Illinois residents qualify for a tax credit to pay a portion of their premiums, many do not. There are no subsidies for individuals who make more than $47,520 a year or for families of four making at least $97,200 a year.

Mike Moyer, a 45-year-old entrepreneur in Lake Forest, Illinois, pays $1,397 each month for Blue Cross Blue Shield insurance to cover himself, his wife and their three children. Meeting the $6,000 deductible is pushing his total health care costs this year well over $20,000.

With a household income that’s too high for a federal tax credit, an increase in premiums next year would mean he would save even less for emergencies and retirement, Moyer said. But he’s grateful for the coverage because old health problems flared up this year.

“It’s been confusing, frustrating and expensive, but this year it’s been totally worth it,” he said. “Blue Cross has been very helpful.”

Other Illinois insurers are proposing double-digit rate increases. But Durbin is focusing on Blue Cross, urging state regulators to hold the company accountable.

Durbin said he met in April with the “highest ranking officials” from Health Care Service Corporation, which runs Blue Cross Blue Shield of Illinois. They “told me they were losing money and considering pulling out of Illinois,” Durbin said.

Blue Cross spokeswoman Kristen Cunningham confirmed the meeting, but declined to answer whether the company was considering leaving the state’s marketplace.

“During the meeting, we shared that we are working hard toward continuing to provide health insurance options for consumers,” Cunningham said in an email to The Associated Press. “We will continue to work with state and federal regulators and health policy makers to help ensure a stable and sustainable insurance marketplace for Illinois.”

Durbin said that after the meeting he asked U.S. Health and Human Services Secretary Sylvia Burwell “to look into Illinois personally, and she sent a team to Chicago to try and understand why there was a greater problem in Illinois than in other major states served by the Blues.”

The Department of Health and Human Services made recommendations “that Illinois BCBS could be more competitive, reduce costs, and still maintain quality care in our state and the other states they serve,” Durbin said.

Cunningham declined to comment on the federal recommendations mentioned in Durbin’s statement.

Republican U.S. Rep. Adam Kinzinger ripped Durbin for criticizing the state’s handling of a “dysfunctional, damaging federal policy,” noting the senator was a leading proponent.

“Bottom line: Obamacare is not working for Illinois families and rather than blame the companies or the consumers or Governor Rauner, Sen. Durbin should recognize and accept the failure of this plan he so adamantly supported,” Kinzinger said.

Durbin has said that the measure is imperfect and lawmakers should work to change it over time.

Consumer advocates are welcoming Durbin’s help, saying Illinois has a weak rate review system, compared to many other states where rate filing information is public and insurance commissioners can deny a rate increase after holding a hearing.

Stephanie Altman of the Chicago-based Shriver National Center on Poverty Law said advocates want Department of Insurance acting director Anne Melissa Dowling, a Rauner appointee, “to take as active a role as she can.”

Durbin’s statement stressed the “solid results” of the Affordable Care Act in lowering the state’s uninsured rate from 15.5 percent in 2013 to 8.7 percent in 2015.