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HHS Pledges $46 Million to States for Health Insurance Price Monitoring

John Commins, for HealthLeaders Media, August 17, 2010

Forty-five states and the District of Columbia will each get $1 million in federal funds to monitor proposed health insurance premium hikes in their jurisdictions, and take action against unreasonable increases, the Department of Health and Human Services has announced.

HHS Secretary Kathleen Sebelius said the funding is needed because health insurance companies in many states hike premiums with little oversight, transparency, or accountability. She says premiums have doubled in the past 10 years, much faster than wages and inflation, putting health coverage out of reach for millions of Americans and business owners.

Twenty-six states and the District of Columbia now have the authority to reject proposed increases that are excessive, but many can't afford to enforce the regulations, which Sebelius said has contributed to unjustified premium hikes in some states. The Affordable Care Act provides states with $250 million in Health Insurance Premium Review Grants over five years.

Sebelius said Affordable Care Act provisions will ultimately increase competition, lower insurance overhead, and provide for risk pooling in health insurance exchanges in 2014, which should cut premiums in the individual market by 14% to 20%. “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,” she said.

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