Pritzker seeks more regulatory authority over homeowners insurance business

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The Consumer Federation of America describes Illinois’ current regulatory environment as “toothless” and ranks the state second in the nation for having the fastest-rising insurance premiums in the country.

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Photo: CNI file photo

State Farm homeowner premiums will rise by roughly 27% in Illinois, prompting calls for greater regulation by residents around the state.

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by Peter Hancock
Capitol News Illinois

SPRINGFIELD - Gov. JB Pritzker is asking state lawmakers for more authority to regulate the homeowners insurance market in Illinois.

His comments came after the Bloomington-based State Farm Fire and Casualty Company notified the Illinois Department of Insurance that it was raising premiums for residential property casualty insurance in Illinois by an average 27.2%.

In a statement July 10, Pritzker called on lawmakers to pass legislation in the upcoming fall veto session, “that prevents insurance companies from taking advantage of consumers through severe and unnecessary rate hikes like those proposed by State Farm.” The veto session is scheduled to begin Oct. 14.

“Over the past six years, our state economy has flourished based on transparent markets and fair competition,” Pritzker said. “State Farm’s actions are antithetical to the core principles that the Illinois business community is built on.”

The increase will raise the average cost of a State Farm homeowners’ policy in Illinois to about $2,175 a year, up from $1,700 before the increase, according to State Farm.

The higher rates took effect July 15 for new policies and will go into effect Aug. 15 for renewals of existing policies.

Current regulations

Although Pritzker was not specific about what kind of increased regulatory authority he wants lawmakers to consider, some consumer advocates have called for giving the state Department of Insurance broad authority to review, modify or even reject proposed rate hikes.

Under current state law, companies are required to file their rates with the Department of Insurance, and the agency can review consumer complaints to determine whether the rates being charged are consistent with those filings.

The department also has the authority to conduct examinations to determine whether a company is paying out claims in a timely manner. It can also conduct examinations into a company’s financial condition and solvency.

But currently, according to the agency, Illinois is the only state in the country that does not prohibit rates from being “inadequate, excessive or unfairly discriminatory,” which means it has no authority to reject a rate filing on those grounds. Douglas Heller, director of insurance for the Washington-based Consumer Federation of America, described Illinois’ law as “among the most toothless in the nation.”

“Almost every state in the country has a law that says for auto, home and most other lines of insurance as well, rates cannot be excessive,” he said in an interview. “Now, it doesn't mean that the regulators around the country do a great job or even have the tools to enforce that very strictly … but Illinois doesn't even have the language that prohibits excessive rates for homeowners insurance companies.”

In April, CFA issued a report that said from 2021 to 2024, Illinois ranked second in the nation for having the greatest increases in homeowners insurance premiums. Average premiums in Illinois rose 50% over that period, more than any other state except Utah, where rates went up 59%.

“At a minimum, Illinois should empower the Department of Insurance to reject or modify excessive rate hikes, which would represent a basic consumer protection that residents in almost every other state enjoy,” Abe Scarr, director of the Illinois Public Interest Research Group, said in a statement in response to the report.

Even with those increases, though, the report indicated that rates in Illinois were relatively modest compared to some other states, particularly those that experience more frequent natural disasters. Florida, Louisiana and Oklahoma ranked highest in average premiums.

In recent years, lawmakers have given the Department of Insurance broader authority to regulate premiums in the health insurance market.

Last year, Pritzker signed legislation giving the agency authority to review and reject proposed rate increases in large-group health insurance plans. That law also prohibited companies from engaging in certain “utilization management” practices that steer patients toward cheaper therapies and medications to lower payouts.

Also last year, Pritzker named a new director of the agency, former state Sen. Ann Gillespie, who had served on the Senate Insurance Committee.

But the agency does not yet have that kind of regulatory authority over property casualty insurance policies for homeowners, renters and condominium owners, a fact that consumer advocates say puts Illinois out of step with the rest of the nation.

Reasons for rate hikes

In his statement, Pritzker accused State Farm of raising rates in Illinois to cover losses the company has suffered in other high-risk states like Florida.

“These increases are predicated on catastrophe loss numbers that are entirely inconsistent with the Illinois Department of Insurance’s own analysis — indicating that State Farm is shifting out-of-state costs onto the homeowners of our state,” he said. “Hard-working Illinoisans should not be paying more to protect beach houses in Florida.”

But State Farm strongly denied that suggestion, saying the increases were directly related to the cost of weather-related disasters in Illinois.

“For example, last year in the state of Illinois alone, we paid out more than $638 million in hail damage claims,” State Farm spokeswoman Gina Morss-Fischer said in an interview. “That was just in Illinois, and it was second only to the state of Texas. And this is the kind of thing that we've started to see more frequently.

“And of course, we're also seeing the increase in replacement costs, longer waits for replacement materials. And these are all things that contribute to the need to make this difficult business decision,” she said.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

School districts serving immigrants in Illinois work to keep under the radar

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The Supreme Court ruling in the 1982 case Plyler v. Doe determined all children in the U.S. have the right to a public education, regardless of immigration status.

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Photo: CDC/Unsplash

A court case in 1982 established that states can not discriminate against undocumented children based on their immigration status, guaranteeing them the same educational opportunities as their peers. Recognizing that children have no control over their parents' immigration status and attempting to break a cycle of poverty, the court ruled that children should not be penalized for their legal status.

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by Judith Ruiz-Branch
Illinois News Connection

CHICAGO - The Trump administration has made it clear it will cut funding from schools continuing diversity, equity and inclusion programs and with record levels of Immigration and Customs Enforcement funding for detention and deportation in the new federal budget, more school districts are quietly rethinking their policies.

Barbara Marler, an independent education consultant and adviser with over 40 years of experience, is working with school districts to help them rephrase DEI-related language so it will not be flagged in automated searches. She explained her goal is to help shield their work and emphasizes the unprecedented nature of her efforts.

"ESL and bilingual, as a field, has always had some level of controversy," Marler acknowledged. "But this is at a whole 'nother level that I've never seen before."

The Trump administration has called DEI policies "dangerous and demeaning." Marler noted school district leaders tell her the current pressures they face feel insurmountable. So far, she has worked with two districts in Illinois on strategies and expects more will follow since the passage of the new federal budget bill last week.

Alejandra Vazquez Baur, a fellow at the Century Foundation and cofounder and director of the National Newcomer Network, said immigrant justice organizations operating in 'red' states have long been aware of the risks and have adapted their language to continue their work discreetly. She added now, even groups in blue states like Illinois, which once operated more openly, are facing increased pressure to avoid being targeted.

"It's scary, because many people who enter into this work do this because they themselves are immigrants, and/or they have undocumented family members or employees that they fear are at risk should the administration come after them, or should they lose funding and not be able to pay their employees," Vazquez Baur outlined.

The Supreme Court ruling in the 1982 case Plyler v. Doe determined all children in the U.S. have the right to a public education, regardless of immigration status. But Vazquez Baur stressed she is concerned about the chilling effect the current administration is having on such basic rights and freedoms. She warned jeopardizing the rights of immigrant students can lead to the erosion of rights for all.

"Many organizations have to back down as they consider all of their circumstances," Vazquez Baur added. "But for those places that have the ability to do so, those organizations and districts should dig deeper, because we cannot be silent in the face of these attacks."

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Pritzker warns 330,000 Illinoisans could lose Medicaid under Trump’s budget plan

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The Illinois Department of Public Health said nine rural hospitals in Illinois would face closure or severe service reductions due to the cuts.

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Photo: Capitol News Illinois/Andrew Adams

President Donald Trump raises his fist at the Republican National Convention in Milwaukee last year alongside U.S. Rep. Steve Scalise (left) and then-running mate J.D. Vance (right). His largest domestic policy bill, which makes drastic cuts to Medicaid, appeared poised to become law last week.

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by Peter Hancock
Capitol News Illinois

SPRINGFIELD - The U.S. House gave final passage Thursday to a budget bill that will cut federal Medicaid spending by an estimated $1 trillion over 10 years.

All three Republican members of the Illinois congressional delegation voted in favor of the bill, despite a last-minute plea from Democratic Gov. JB Pritzker who warned the bill will result more than 330,000 Illinoisans losing Medicaid coverage and have a devastating effect on some rural hospitals.

“As those who are entrusted with protecting the health of all your constituents, I urge you to oppose these harmful Medicaid provisions and work to protect healthcare access for rural Illinois families, workers, and veterans,” Pritzker wrote in the letter addressed to GOP Reps. Mike Bost, Darin LaHood and Mary Miller.

The cuts would translate to about $48 billion in Illinois over that period, or about 20% of what the state would otherwise receive, according to an analysis by KFF, a nonpartisan health policy research organization.

That would be one of the largest percentage reductions in any state in the nation, according to KFF, a nonpartisan health policy research organization formerly known as the Kaiser Family Foundation. Louisiana and Virginia would each see cuts of about 21%, KFF said.

The state-level analysis is based largely on Congressional Budget Office estimates showing the bill would reduce federal Medicaid spending by $1 trillion nationwide over the next decade.

The KFF analysis does not include estimates of the number of people who would lose Medicaid coverage under the bill, noting how that will depend on how individual states respond to the policy changes contained in the bill. But overall, it estimates the number of uninsured Americans will grow by 11.8 million.

The bill, which includes many of President Donald Trump’s domestic policy priorities – including tax cuts and increased spending on border security – passed the Senate on Tuesday by a vote of 51-50, with Vice President J.D. Vance casting the tie-breaking vote. Both senators from Illinois, Democrats Dick Durbin and Tammy Duckworth, voted no.

The final vote in the House was 218-214.

“The One Big, Beautiful Bill is a once-in-a-generation victory for the American people,” Miller said in a statement after the House vote. “It delivers on President Trump’s America First agenda with bold, decisive, and immediate action. This is the most pro-worker, pro-family, pro-America legislation I have voted for during my time in Congress, and I was proud to help get it across the finish line for the hardworking Americans across my district.”

Medicaid and the health care marketplace

Medicaid, which is jointly funded by states and the federal government, provides health coverage for lower-income individuals and families. It was established in 1965 alongside Medicare, the federally funded health coverage program for people over 65.

Today, according to the Illinois Department of Healthcare and Family Services, the program covers about 3.4 million people in Illinois, or a fourth of the state’s population. At a total cost of $33.7 billion a year, it is one of the largest single categories of expenditures in the state’s budget. It pays for about 40% of all childbirths in the state, according to KFF, as well as 69% of all nursing home care.

But questions about its future loomed over the Illinois General Assembly during the just-completed legislative session as both Congress and the General Assembly were crafting their respective budgets for their upcoming fiscal years.

“This was a difficult year because of the unprecedented changes and cuts that are looming on the horizon in Washington,” state Rep. Anna Moeller, D-Elgin, said on the floor of the Illinois House during debate over a Medicaid bill on the final day of the session.

Speaking with reporters at an unrelated event Tuesday, Pritzker predicted “hundreds of thousands” of people in Illinois will lose Medicaid coverage if the Senate bill is signed into law.

“This is shameful, if you ask me, and it’s going to be very hard to recover,” Pritzker said. “The state of Illinois can’t cover the cost – no state in the country can cover the cost of reinstating that health insurance that is today paid for mostly by the federal government, partly by state government.”

Policy changes under the bill

According to KFF, most of the reductions in Medicaid spending would result from just a few policy changes contained in the bill Those include imposing a work requirement on adults enrolled in Medicaid through the Affordable Care Act, also known as “Obamacare.” That law expanded eligibility for Medicaid to working-age adults with incomes up to 138% of the federal poverty level. About 772,000 people in Illinois are enrolled under that program.

The bill also calls for requiring people enrolled through the ACA expansion to verify their continued eligibility for Medicaid twice a year instead of annually. That is expected to filter out enrollees whose incomes rise above the eligibility limit as well as those who simply fail to complete the verification process.

Another provision would limit the ability of states to finance their share of the cost of Medicaid by levying taxes on health care providers. Illinois imposes such taxes on hospitals, nursing facilities and managed care organizations that administer the program. Revenue from those taxes is used to draw down federal matching funds that are then used to fund higher reimbursement rates to health care providers.

The final version of the bill does not, however, include a provision penalizing states like Illinois that also provide state-funded health care to noncitizens who do not have lawful status to be in the United States. That provision, which was included in the earlier House version, was not included in the Senate bill, according to KFF.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.