Health Law and Regulation

$46 Million to Help States Improve Health Insurance Premium Hikes

Grant awards of $46 million to 45 states and the District of Columbia will be used to help improve the oversight of proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes and ensure consumers receive value for their premium dollars, according to HHS. The Affordable Care Act provides states with $250 million in health insurance premium review grants over five years to help create a more level playing field by improving how states review proposed health insurance premium increases and holding insurance companies accountable for unjustified premiums increases.

Insurance companies in many states have increased health insurance premiums with little oversight, transparency or public accountability. Health insurance premiums have doubled on average during the last 10 years, much faster than wages and inflation, putting health coverage out of reach for millions of Americans and business owners. Today, 26 states and the District of Columbia have the authority to reject a proposed increase that is excessive, lacks justification or otherwise exceeds state standards. Many states that have the authority lack resources to exercise it meaningfully. This lack of authority and resources for states has unfortunately contributed to unjustified premium increases in some states.

States have proposed to use the new funding in a variety of ways:

• Additional Legislative Authority: 15 states and the District of Columbia will pursue additional legislative authority to create a more robust program for reviewing or requiring advanced approval of proposed health insurance premium increases to ensure that they are reasonable.
• Expand the Scope of Health Insurance Premium Review: 21 states and the District of Columbia will expand the scope of their current health insurance review, for example by reviewing and requiring pre-approval of rate increases for additional health insurance products in their state.
• Improve the Health Insurance Premium Review Process: All 46 state grantees will require insurance companies to report more extensive information through a new, standardized process to better evaluate proposed premium increases and increase transparency across the marketplace.
• Make More Information Publicly Available: 42 states and the District of Columbia will increase the transparency of the health insurance premium review process and provide easy-to-understand, consumer friendly information to the public about changes to their premiums.
• Develop and Upgrade Technology: All state grantees will develop and upgrade existing technology to streamline data sharing and put information in the hands of consumers more quickly.