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Home » Information, News

States Can Apply for Nearly $200 Million to Help Fight Health Premium Increases

Article / Review by on February 24, 2011 – 4:49 pmNo Comments

States Can Apply for Nearly $200 Million to Help Fight Health Premium Increases
Second round of HHS grants will continue to help support and incentivize States in developing effective premium rate review programs

Today, the U.S. Department of Health and Human Services (HHS) announced that nearly $200 million in new grant funds are now available to help States develop programs that will make health insurance premiums more transparent. The new funds would also give States the power to stop unreasonable premium increases from taking effect.

This funding opportunity builds on the $46 million awarded in August of 2010 to help 45 States and the District of Columbia crack down on unreasonable premium hikes.  It also complements new rules proposed in December of 2010 to require insurance companies to publicly justify unreasonable premium rate increases.

“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, as well as to help make sure that consumers and businesses are getting value for their premium dollars.”

The new funding will help States create or enhance their premium rate review programs by ensuring proposed rate hikes are comprehensively reviewed and by bringing greater transparency and openness to the rating process.  Of the total funding, $149 million is available to States for baseline grants to achieve these goals.

Approximately $50 million in additional grant funds are available to qualifying States in two different ways:
– “Workload” grants totaling $22.5 million will be distributed to States with larger populations and more health insurers.
– “Performance” incentives totaling $27.5 million will be awarded to States that have – or enact – the authority to approve or disapprove rate increases.

“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,” said Larsen.

The Affordable Care Act includes a wide variety of provisions designed to promote accountability, affordability, quality and accessibility in the health care system for all Americans, and to make the health insurance market more consumer-friendly and transparent. For example, insurers are generally required to meet a medical loss ratio standard to spend at least 80 percent of premium dollars on health care and quality-improvement activities as opposed to overhead, marketing, CEO salaries, and profits.

This grant solicitation can be found at by searching for CFDA 93.511.  Read the fact sheet at

* The above story is reprinted from materials provided by USA Department of Health and Human Services (HHS)
** More information at USA Department of Health and Human Services (HHS)


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