HHS Urges States to Apply for Federal Grants to 'Help Fight Health Premium Increases'

By Susan Jones | February 25, 2011 | 10:43 AM EST

(CNSNews.com) - The Health and Human Services Department is urging the states to apply for federal grants that will help them "crack down" on health insurance companies' "unreasonable premium increases."

Nearly $200 million is available to "help fight health premium increases," and that's in addition to the $46 million awarded to 45 states and the District of Columbia last August.

The money will be used to help states create or enhance their premium rate-review programs.

The grants will ensure that proposed premium rate hikes are "comprehensively reviewed," bringing greater transparency and openness to the rating process. HHS said the new funds also will give states the power to stop unreasonable premium increases from taking effect.

“For too long, families and small business owners have struggled to pay ever increasing health insurance premiums,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, which administers the rate-review grants. “The Affordable Care Act provides States new resources and tools to curb those rising costs," Larsen said, and it also ensures that consumers and businesses are getting value for their premium dollars.

“Enhancing States’ ability to crack down on unreasonable premium increases is just one of the ways the Affordable Care Act is helping to protect consumers from the worst insurance industry abuses,” Larsen added.

America’s Health Insurance Plans (AHIP), the national association representing approximately 1,300 health insurance plans, told HHS in a Feb. 22, 2011 letter that "strong steps outside of the rate review process are needed to address the underlying factors that are driving medical costs."

AHIP also noted that the rate review process "cannot serve as a substitute for meaningful health care cost containment."