Healthcare Business News

HHS announces grants for insurance rate reviews

By Rebecca Vesely
Posted: February 24, 2011 - 3:45 pm ET

HHS has announced nearly $200 million in grants available to states in order to enhance their insurance rate review processes.

A total of $250 million in state rate review funding was made available through the Patient Protection and Affordable Care Act. Last August, HHS awarded $46 million to 45 states and the District of Columbia to enhance their insurance rate review functions.

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“We know that rate review is an extremely effective took to help consumers,” said Steve Larsen, director of HHS' Office of Oversight.

There are new four grant categories for the new funding totaling $199 million. The first grants are three-year “baseline” grants of $3 million per state. Applications are due Aug. 15. The second grants are two-year baseline grants of $2 million, with applications due in 2012.

States can also get added funding in two areas: “Workload grants” totaling $22.5 million to states with large populations and multiple insurers, and “performance incentives” totaling $27.5 million to states that have the statutory authority to approve or reject insurance rate increases. The idea with all these grants is to improve transparency and make sure any premium rate increases are thoroughly reviewed.

In December, HHS issued proposed regulations on rate review that require insurers to publicly justify rate increases of 10% or more beginning July 1. States must either review these larger rate increases or HHS will do it for them.

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