Last month, we blogged about the start of the Affordable Care Act’s (ACA) rate review rules that oblige insurers asking for premium increases of 10 percent or more (for plans in the individual and small group markets) to publicly disclose and justify such requests. As we noted in the earlier post, this means that insurers now need to be more accountable and transparent than ever when they ask for large premium rate increases. Good news for consumers to be sure!
On September 20, we had more good news in the world of rate review. On that day, the federal government announced a second round of ACA rate review grant awards to states that will provide a total of $109 million in funding to 28 states and the District of Columbia to assist states in further strengthening and improving their rate review processes. This most recent round of grant awards builds on the $48 million in funds previously provided to states for rate review.
A couple of states (Maine and Oregon) have chosen in the past to use a portion of their rate review funding to contract with consumer advocacy groups (Consumers for Affordable Health Care in Maine and Oregon State Public Interest Research Group in Oregon) for activities such as obtaining an independent actuary to examine rate increase requests or helping to solicit consumer input into the rate review process. For this second round of grants, California has decided to contract with consumer advocacy organizations to also look at rate filings and submit comments to help improve public input in the rate evaluation process.
Perhaps all too predictably, a recent Politico article saw America’s Health Insurance Plans (AHIP) alleging that using part of the rate review funding in this way was somehow inappropriate. Their complaining about small portions of grant funds being legitimately contracted to organizations dedicated to giving consumers a robust voice in the rate review process seems a bit like, as one Community Catalyst ally put it, Goliath complaining that David was allowed to have a sling and some stones.
For a short fact sheet on this second round of rate review grants, you can click here. If you’d like to dig deeper and see a detailed report that outlines both the successes states have had with the first round of rate review grants and what each state proposes to do with funds in the second round, you can click here. Rate review is not a panacea for controlling health care costs, but it is a very useful tool that the ACA gives us to move in the right direction.
—Patrick M. Tigue, Senior Policy Analyst