WASHINGTON - HHS Secretary Kathleen Sebelius has announced the award of $1 million to Utah to help crack down on health insurance premium increases. Utah will use this Affordable Care Act funding to help improve the oversight of proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes, and ensure Utahns receive value for their premium dollars.
"The Affordable Care Act puts in place critical market reforms to improve quality and reduce the cost of health care for employers and individuals. Increased competition, lower insurance overhead, and better risk pooling in health insurance Exchanges in 2014 are expected to reduce premiums in the individual market by anywhere from 14-20 percent according to the Congressional Budget Office," said HHS Secretary Kathleen Sebelius. "Between now and then, we will continue to work with States to ensure consumers are receiving value for their premium dollars and to avoid the kind of double digit premium increases seen recently. The State proposals approved today demonstrate the need and desire for new resources and tools to help them protect against unjustifiable premium increases."
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 premium increases. Applications for the first round of Health Insurance Premium Review Grants were made available on June 7.
The grants build on the Obama Administration's work with States to implement the Affordable Care Act. Earlier this year, Secretary Sebelius called on certain insurance companies to justify large premium increases and encouraged State and local officials to obtain stronger health insurance premium review authorities under State laws. This increased scrutiny by the Administration and by several States has led to the withdrawal or reduction of several proposed health insurance premium increases that in some cases turned out to be based on faulty assumptions and data.
This grant will be used for the purposes detailed in the approved application. The following is a general summary of how Utah intends to use its funding:
Pursue Additional Legislative Authority: Currently Utah has no explicit authority to review or pre-approve premium increases. The State intends to develop legislative language to allow for expanded rate review in the individual and small group markets, and to add large group market review. In addition, language to allow public access to rate filing and creation of a web based portal for consumers will be developed. Legislation will be presented in the 2011 session.
Expand the Scope of the Review Process: Utah will increase the number of reviews conducted, and expand the scope of review, with the goal of reviewing 50 percent of small and individual market filings and to add the large group market.
Improve the Review Process: Currently insurers are required to file rating manuals with the department before use. Grant funds will be used to create a comprehensive health insurance premium review process. This will include development of review manuals as well as staff training.
Increase Transparency and Accessibility: Currently all health insurance premium filings are deemed protected records under State law. Utah will attempt to gain legislative authority to create a consumer web based environment, and will implement a public hearing process.
Develop and Upgrade Technology: Utah will collect, analyze, and report critical information about health insurance premium filings.
"States will use these grant dollars in the way that makes the most sense for their insurance consumers," said Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight. "As we continue to implement the new health insurance reform law, we will continue to work with States to ensure they have the tools they need to ensure the stability of the marketplace, keep costs low and provide consumers with increased transparency, choice and quality they need to make the best health care decisions for their businesses and families."
The Health Insurance Premium Review Grants are one element of a broad effort under the Affordable Care Act to reduce the unreasonable premium increases proposed by some insurers today. Additional resources from this $250 million program will be available in subsequent years to further strengthen State health insurance premium review procedures.
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