Public Accountability Report

The original purpose of the Comprehensive Health Insurance Plan (CHIP) program was to provide coverage to individuals who were “uninsurable.” This part of CHIP is known as the Traditional CHIP pool. There were two plans available under the Traditional pool. The Traditional Non-Medicare Plan is for individuals who are either unable to obtain private coverage because of a medical condition, or able to find coverage but at a rate exceeding the applicable CHIP rate. The Traditional Medicare Plan was for individuals under age 65 who were covered by Medicare Parts A and B because of end-stage renal disease or other disability.

Following the passage of the federal Health Insurance Portability and Accountability Act (HIPAA) in 1996, CHIP also became responsible for providing health coverage to individuals who have had, but subsequently lost, group insurance. On the state level, legislation was enacted creating the HIPAA-CHIP Pool, and coverage in it was first provided to eligible individuals on July 1, 1997. The pool is funded primarily by an assessment on health insurers and enrollees’ premiums. Additional responsibility came in 2003 with the designation of CHIP as a “qualified health plan” as established in the federal Trade Act of 2002. Qualified Illinois residents could use coverage in the HIPAA-CHIP pool to claim the Health Coverage Tax Credit (HCTC) if they were Trade Adjustment Act (TAA)-certified or receiving a pension from the Pension Benefit Guaranty Corporation (PBGC). Pursuant to federal law, the HCTC ended December 31, 2013. In 2008, coverage changes were implemented in response to the Medicare Reform Act to provide high-deductible health plan (HDHP) options to CHIP enrollees in either the Traditional or the HIPAA pool. HDHP plans can be used in conjunction with health savings accounts to allow enrollees to take advantage of federal income tax provisions that allow payment for out-of-pocket medical expenses from pretax dollars.

On March 23, 2010, the Patient Protection and Affordable Care Act (ACA) became law. In part, it prohibits health insurers from denying coverage due to preexisting conditions. In 2013, plans were implemented to prepare for CHIP enrollees who would be transitioning to other coverage through the new health insurance exchange or in the marketplace as a result of the ACA. In addition, the Board made the decision to discontinue the Traditional Medicare Plan effective December 31, 2013 and not to enroll or renew individuals into the Traditional pool after April 30, 2014 due to the availability of guaranteed coverage under the ACA. Since fiscal year 2014, the majority of CHIP enrollees have transitioned into the marketplace as a result of the ACA. On July 26, 2016, the Board voted to cap enrollment at zero for the Traditional Pool, since the pool had not had any enrollees since June 30, 2014 or received an appropriation since fiscal year 2013.

Illinois Public Act 102-0159 was signed by the Governor on July 23, 2021. With the implementation of this legislation, CHIP shall discontinue as the alternative market for health insurance for certain Illinois residents and as the alternative mechanism, as described in the federal HIPAA, effective no later than January 1, 2022. All powers, duties, rights, and responsibilities of CHIP and the CHIP board shall be transferred to and vested in the Director of Insurance as rehabilitator or liquidator to oversee the wind down and dissolution of CHIP.