HHS Offers States $200M to Fight 'Unreasonable' Premium Hikes

John Commins, February 25, 2011

The Department of Health and Human Services said Thursday it is making available nearly $200 million in grants to help states combat "unreasonable premium increases" of 10% or more.

HHS said the new money will bolster state programs to improve transparency and thoroughness in the review process for health insurance premium rate hikes, and builds on the $46 million awarded last August to help 45 states and the District of Columbia crack down on unreasonable premium hikes. The grants will help states with new federal rules under the Affordable Care Act that proposed in December to require insurance companies to publicly justify unreasonable premium rate increases, HHS said.

"For too long, families and small business owners have struggled to pay ever increasing health insurance premiums," said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, which administers the rate review grants. "The Affordable Care Act provides States new resources and tools to curb those rising costs, as well as to help make sure that consumers and businesses are getting value for their premium dollars."

Of the total funding, $149 million is available to states for baseline grants to improve transparency and effectiveness in rate hike review. Another $50 million in grant funds are available to states as either: "workload" grants totaling $22.5 million for states with larger populations and more health insurers; or "performance" incentives totaling $27.5 million for states that have – or enact – the authority to approve or disapprove rate increases.

America's Health Insurance Plans and other insurance industry advocacy groups complain that the government has focused on healthcare premium increases while ignoring the underlying costs driving the increases.



John Commins

John Commins is a senior editor at HealthLeaders Media.

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