States Get Premium Oversight Monies

On Tuesday, March 16, the Department of Health and Human Services announced grants to 45 states and the District of Columbia — $1 million each — to monitor how health insurance premiums are being priced and to take action if unfair hikes are detected.

The sad truth, and the one HHS Secretary Kathleen Sibelius hit squarely on the head, is that premiums are set without much in the way of accountability or transparency. As a result, over the last decade rates have doubled, pricing many consumers out of even the most minimal coverage.

While 26 states and the District of Columbia already have the power to reject unfair premium increases, they don’t necessarily have the money to enforce those decisions. That’s where federal oversight and federal funds are sorely needed as the nation moves into the next phases of insurance and health care reform.

The monies, in this case, are part of $250 million included in the Affordable Care Act for grants to provide health insurance premium reviews over the next 5 years.

By 2014, the hope is that increased competition in the insurance marketplace coupled with lower overhead and the establishment of insurance-exchanges for high-risk customers will mitigate the need for what amounts to price gouging with coverage rates.

The states that receive the money can use it in multiple ways to improve the premium review process, but overall, it’s a positive step forward in protecting consumers from steep health care rates as the broader health care reform program is set in place.