Help for States to Keep Down Premiums

Health insurance costs too much. And every year, millions of American consumers and business owners learn their insurance premiums are going to cost more. Sometimes those increases are surprising and overwhelming and leave families and business owners having to choose between keeping coverage or paying other expenses. If this has happened to you, you know how frustrating it can be to not know why your costs are rising and if your premium dollars are being spent wisely.

Now, thanks to the Affordable Care Act, States have new resources to help them review proposed rate increases and help protect Americans from large and unreasonable health insurance premium hikes.

Just today, HHS announced nearly $200 million in new grant funds are available to help States strengthen their programs for reviewing health insurance premium increases. These grants will build on the $46 million already awarded to States last August. Effective rate review helps to slow premium growth. Some insurance companies have scaled back their rate increases in the face of State review. Other insurance companies have cut their rate requests in half, saving consumers money.

This new funding opportunity will assist States with meeting the recently proposed requirements for an effective State rate review program. This new funding opportunity is designed to help States create or enhance rate review programs that meet the unique needs of their insurance markets, including by:

* Ensuring proposed rate hikes are comprehensively reviewed;
* Making the review process transparent to the public; and
* Blocking unreasonable rate hikes when possible.

Under the proposed regulation, an effective rate review program would also include an infrastructure to collect, analyze, and report critical information about rate review outcomes and trends, including whether or not proposed rate increases have been approved, if State law provides authority to disapprove rates.

These grants give States more resources to hold down premium costs for consumers and businesses. It is also just one way the Affordable Care Act is going to help make health insurance more affordable – for example, another part of the law requires insurers to spend at least 80 percent of your premium dollars on health care or quality improvements. This means that more Americans will know that their insurance companies don’t have free rein to raise rates. By holding insurance companies accountable, you will have better value for your premium dollars.