HHS Secretary Kathleen Sebelius today announced in a press release, Affordable Care Act grant awards of $109 million to 28 states and the District of Columbia that will help fight unreasonable premium increases and protect consumers, reports marketwatch.com.
HHS also released a new report entitled Rate Review Works detailing how previous rate review grants are fighting premium hikes and helping make the health insurance marketplace more transparent.
"We're committed to fighting unreasonable premium increases and we know rate review works," said Secretary Sebelius. "States continue to have the primary responsibility for reviewing insurance rates and these grants give them more resources to hold insurance companies accountable."
As of September 1, 2011, the Affordable Care Act requires health insurers seeking to increase their rates by 10 percent or more in the individual and small group market to submit their request to experts to determine whether the rates are unreasonable. The Affordable Care Act also requires insurance companies to publicly justify unreasonable premium rate increases. These provisions will bring greater transparency, accountability, and, in many cases, lower costs for families and small business owners who struggle to afford coverage.
The Affordable Care Act provides states with $250 million in Health Insurance Rate Review Grants, $48 million of which has previously been awarded to 42 states, the District of Columbia and five territories. As outlined in the new report, these grants and other state rate review efforts are already making a difference:
In July 2011, Oregon recently forced an insurer to lower its request for a rate hike by nearly 10 percent. This put money back in the pockets of approximately 60,000 consumers.
Over the past year, at the direction of the state insurance commissioner, Arkansas has been negotiating with insurance companies requesting rate increases greater than 10 percent on their individual health insurance products. The commissioner recently negotiated a lower rate affecting approximately 90,000 policyholders.
Last year, thanks to new rate review authority, North Carolina saved beneficiaries $14.5 million by reducing a rate increase request from the state's largest insurance company.
The previous grants also contributed to nine states passing legislation to strengthen their ability to review and prevent excessive premium increases.
The grants awarded today help to create a more level playing field by improving how states review proposed health insurance rates and holding insurance companies accountable for disclosing information about unjustified rate increases.