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States' rate review programs receive $200M boost from HHS

Health plans beware--states can soon improve their premium rate review programs by applying for $200 million in healthcare grants now offered by HHS.

About $150 million will help states create and enhance rate review programs. Another $22.5 million will be given to states with higher populations, while $27.5 million will go to states with programs that allow them to block an insurance rate from going into effect, according to The Hill’s Healthwatch.

"Of course, our preference and desire is for states to be in a position to be the reviewer of rates," said Steve Larsen, director of HHS's Center for Consumer Information and Insurance Oversight. "We are confident that states will have effective review processes. This absolutely helps them to get there," he said, reports Reuters.

Larsen defended HHS against criticism by insurers that the rate review program doesn't address underlying growth in healthcare costs. There are "many" components of the health reform law that address reining in growth in healthcare costs, including the medical-loss ratio formula, National Underwriter reports.

States will have the opportunity to apply for the $150 million rate review in two phases. State applications for a three-year, $3 million award are due by August. A second round next year will deliver $2 million, two-year grants, notes Healthwatch.

To learn more:
- read The Hill’s Healthwatch article
- see the National Underwriter story
- check out the Reuters piece

Related Articles:
Proposed ACA rule: Insurers face tighter rate review
Feds seek oversight of insurers' rate increases
HHS may extend rate reviews to large group market

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