Feds Target Rate Hikes with New Grants

The federal government is offering states $1 million each to step up their review of health insurance premium hikes. Officials at the Health and Human Services department announced the availability of $51 million in new grants under the Affordable Care Act earlier today, aimed at helping states to strengthen their rate review processes.

Image via Flickr user Rojer by Creative Commons License.

The move is the latest in a series of new initiatives from HHS designed to exercise greater authority over the insurance industry. Insurers have been in the administration’s crosshairs for months and were often painted as the villains in the quest to pass health reform legislation. In May, HHS Secretary Kathleen Sebelius sent a letter to governors and state insurance commissioners calling on them to review their authority to approve insurance rate increases before they take effect. These new grants will provide funding for states to expand their authority for reviewing, approving, or modifying health plan requests for premium increases.

To be eligible for the $1 million, states have to submit a plan to HHS for how they would use the money to develop or enhance their process. HHS officials said they assume most states will apply, despite the varying state laws surrounding the review of premium rates.

The $51 million in grants announced today is just the beginning. The new health reform law allows HHS to give out $250 million in total over 5 years. The second round of grants will be awarded beginning in fiscal year 2011.

—Mary Ellen Schneider (on Twitter @MaryEllenNY)

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Filed under Health Policy, health reform, Practice Trends

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