Forty-five states and the District of Columbia will each receive $1 million to help improve health premium oversight, the Department of Health and Human Services announced this week.
The money in this round of grants will boost authority on the state level to reject rate hikes that are deemed excessive.
Only 26 states and the District of Columbia have the authority to reject a proposed increase that is excessive, lacks justification or otherwise exceeds state standards. But many states that do have the authority lack resources to exercise it meaningfully, HHS reports, and this lack of authority and resources for states has contributed to unjustified premium increases in some states. On average, health insurance premiums have doubled over the past decade.
"The Affordable Care Act puts in place critical market reforms to improve quality and reduce the cost of health care for employers and individuals. Increased competition, lower insurance overhead, and better risk pooling in health insurance Exchanges in 2014 are expected to reduce premiums in the individual market by anywhere from 14 percent to 20 percent according to the Congressional Budget Office," said HHS Secretary Kathleen Sebelius.
"Between now and then, we will continue to work with states to ensure consumers are receiving value for their premium dollars and to avoid the kind of double digit premium increases seen recently. The state proposals approved today demonstrate the need and desire for new resources and tools to help them protect against unjustifiable premium increases."
Health care reform provides$250 million over five years to help states improve how they review proposed health insurance premium increases. States applied this summer for the first round of Health Insurance Premium Review Grants.
"States will use these grant dollars in the way that makes the most sense for their insurance consumers," said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight. "As we continue to implement the new health insurance reform law, we will continue to work with states to ensure they have the tools they need to ensure the stability of the marketplace, keep costs low and provide consumers with increased transparency, choice and quality they need to make the best health care decisions for their businesses and families."
How states will use the money:
- Additional Legislative Authority: 15 states and the District of Columbia will pursue additional legislative authority to create a more robust program for reviewing or requiring advanced approval of proposed health insurance premium increases to ensure that they are reasonable;
- Expand the Scope of Health Insurance Premium Review: 21 states and the District of Columbia will expand the scope of their current health insurance review, for example by reviewing and requiring pre-approval of rate increases for additional health insurance products in their State.
- Improve the Health Insurance Premium Review Process: All 46 state grantees will require insurance companies to report more extensive information through a new, standardized process to better evaluate proposed premium increases and increase transparency across the marketplace;
- Make More Information Publicly Available: 42 states and the District of Columbia will increase the transparency of the health insurance premium review process and provide easy-to-understand, consumer friendly information to the public about changes to their premiums; and
- Develop and Upgrade Technology: All state grantees will develop and upgrade existing technology to streamline data sharing and put information in the hands of consumers more quickly.
A detailed state-by-state summary of proposed activities can be found here.