The Centers for Medicare & Medicaid Services has announced the availability of $22 million in funding to state insurance regulators to use for issuer compliance with Affordable Care Act key consumer protections. This award opportunity enables states to seek funding for activities related to planning and implementing select federal market reforms and consumer protections including: essential health benefits, preventive services, parity in mental health and substance use disorder benefits, appeals processes, and bringing down the cost of health care coverage (also known as medical loss ratio provision).
“These additional grants will continue our partnership with State Departments of Insurance to help support their efforts to ensure their laws, regulations, and procedures are in line with Federal requirements and that States are able to effectively oversee and enforce these provisions under the ACA that provide important consumer protections. In addition, State departments of insurance are vital to the oversight of health insurance plans. These departments are responsible for making sure that premiums are reasonable and justified, ensuring company solvency, and protecting consumers,” said Kevin Counihan, CEO of the Health Marketplace. “Last year, despite headlines of double-digit premium increases, when financial assistance, consumer shopping and aggressive state rate review were factored in, premiums through HealthCare.gov increased just $4 a month for those receiving tax credits. These additional grants will continue our partnership with states to help support their efforts to enforce consumer protections guaranteed by the Affordable Care Act.”
As State commissioners of insurance review proposed rates, they will have a number of important factors to consider. These include medical trend, the end of the temporary reinsurance program, the one-time 2017 moratorium on the Health Insurance Provider Fee, and recent data and policy information which may be accounted for through supplemental filings by issuers. The report on risk adjustment and reinsurance for 2015, which will be issued on June 30, may also affect rates.
Last week, the Department of Health and Human Services (HHS) announced that the Department will make three announcements in June regarding ongoing efforts to: strengthen the risk pool, work with issuers and state insurance regulators, and step up Marketplace outreach, especially to young adults in advance of Open Enrollment 4. Today’s announcement is part of the second step in that process. Last Wednesday, CMS announced a series of actions to strengthen the risk pool, including curbing abuses of short-term insurance plans, improving the risk adjustment program, and beginning the implementation of the special enrollment confirmation process, among other announcements. And last Thursday, HHS hosted an Issuer Innovation Summit to highlight best practices of issuers in attracting, retaining, and improving the health of consumers.
The funding is part of the $250 million in state rate review grants the Affordable Care Act provided to improve the process for how states review proposed health insurance rate increases and hold insurance companies accountable for unjustified hikes. The funds announced today are unobligated rate review grant funding from prior years. In 2015, rate review led to an estimated $1.5 billion in savings for consumers. Rate review grant funds not obligated by the end of FY 2014 are available to HHS to issue grants to states for planning and implementing the insurance market reforms and consumer protections.
The Affordable Care Act brought unprecedented transparency into health insurance pricing. Before the Affordable Care Act, insurance companies in many states were able to raise rates without explaining their actions to regulators or the public. Today, the rate review process improves insurer accountability and transparency. It ensures that experts evaluate whether the proposed rate increases are based on reasonable cost assumptions and solid evidence and gives consumers the chance to comment on proposed increases. For example, one way we are improving consumer understanding of the rate review process is by triggering the threshold for review at the plan level instead of the product level. The Affordable Care Act requires that a summary of rate review justifications and results be accessible to the public in an easily understandable format.