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HHS Grants $46M to States to Crack Down on Unreasonable Health Insurance Premium Hikes

sebeliusDepartment of Health and Human Services Secretary Kathleen Sebelius yesterday announced grant awards of $46 million to 45 states and the District of Columbia that will help improve the oversight of proposed health-insurance premium hikes, take action against insurers seeking unreasonable rate increases, and ensure consumers receive value for their premium dollars.

Insurance companies in many states have long increased health-insurance premiums with little oversight, transparency, or public accountability, according to HHS.  During the past decade, health-insurance premiums have doubled on average, much faster than wages and inflation, making it hard for millions of Americans and business owners to afford health coverage.

Currently, only 26 states and the District have the authority to reject a proposed increase that is deemed excessive, lacks justification or otherwise exceeds state standards. Many states with authority lack resources to exercise it meaningfully.

The Affordable Care Act implements important market reforms to improve quality and cut the cost of healthcare for employers and individuals, Sebelius said. 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 to 20 percent, according to the Congressional Budget Office.

“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,” Sebelius said. “The state proposals approved today demonstrate the need and desire for new resources and tools to help them protect against unjustifiable premium increases.”

The Affordable Care Act gives states with $250 million in Health Insurance Premium Review Grants over five years to help create a more level playing field by improving how states review proposed health insurance premium increases and holding insurance companies accountable for unjustified premiums increases. Applications for the first round of Health Insurance Premium Review Grants were made available June 7.

States have proposed to use this funding in a variety of ways, including additional legislative authority; improving the Health Insurance Premium Review Process; making more information publicly available; and developing and upgrading technology.

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