Healthcare Business News

$109 million marked for insurance rate-review efforts

By Jessica Zigmond
Posted: September 20, 2011 - 1:45 pm ET

HHS announced $109 million in grant funding Tuesday to help states bolster their insurance rate-review efforts, while the group representing the nation's health plans asserted such attention distracts from what it sees as the main factor in surging healthcare costs.

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“The current focus on rate review ignores the soaring cost of medical care that is driving up the cost of coverage and taking up a greater and greater share of federal and state budgets,” America’s Health Insurance Plans noted in a blog. The posting also cited opinions from industry leaders, including one from Scott Harrington, a professor in the Wharton Healthcare Management Department at the University of Pennsylvania, who said rate-review provisions and their implementation will neither enhance consumer choice nor lower premiums.

HHS Secretary Kathleen Sebelius, meanwhile, said 28 states and Washington, D.C., will receive the awards to “bring more transparency to the market.” The funding is part of the $250 million included in last year’s Patient Protection and Affordable Care Act for rate-review grants. To date, $48 million has been awarded to 42 states, D.C., and five territories, Sebelius said.

In announcing the awards, HHS also released Rate Review Works (PDF), a report that lists the grant recipients; highlights how states have used the first cycle of funding to improve their rate-review processes; and mentions states’ proposals for implementing this latest round of funding.

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