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Life Health > Health Insurance > Health Insurance

PPACA: HHS Provides $109 Million in Rate Review Grants

By Allison Bell

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Federal regulators have provided more funding for state efforts to block what officials believe to be unreasonable health coverage premium increases.

Officials from the U.S. Department of Health and Human Services (HHS) and the Center for Consumer Information and Insurance Oversight (CCIIO) – the HHS arm that is overseeing implementation of many components of the Patient Protection and Affordable Care Act of 2010 (PPACA) – say $109 million in grants will go to 28 states and the District of Columbia.

PPACA authorized HHS to work with the states to develop a health insurance rate review program, and HHS has decided that proposals to increase individual and small group rates more than 10% should get extra scrutiny.

States can run their own rate review programs or let HHS handle rate reviews.

The rate review requirements started to take effect Sept. 1.

PPACA provided a total of $250 million in state rate review program funding. HHS previously has awarded $48 million of that funding to 42 states, the District of Columbia and 5 territories, HHS officials say.

Health insurance regulators in 7 states will be using the new grants to introduce bills to strengthen their authority to review or publicize proposed rate increases, and 19 states and the District of Columbia will be using the new grants to expand the scope of rate review programs, officials say.

In conjunction with a press conference announcing the new round of grants, HHS officials prepared a report with the title “Rate Review Works.”

Officials note that many states used awards from the first round of grants to improve their rate review process. Utah, for example, had no analysts on staff to review rates before it received its grant, and it now is reviewing all submitted rate filings, officials say.

When talking about quantitative results, authors of the report focused on indicators that reviews had decreased rates, rather than on indicators suggesting that the reviewed rates more accurately reflect the underlying cost trends.

Officials report, for example, that Nevada used its grant to hire a health actuary and use outside actuarial resources, and that it used those resources to disapprove 17 of 30 rate filings received during the first quarter.

Other rate review coverage from National Underwriter Life & Health:

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