The federal government is doing all that it can to ensure that the states are not short of resources while implementing the Patient Protection and Affordable Care Act. The US Department of Health and Human Services has announced a funding of $200 million for the states to develop programs that will bring in more transparency to the hike in premium rates.

This is apart from the $46 million that was awarded to 45 states and the District of Colombia in August 2010 to control premium hikes. The new funds will complement not only the December ruling wherein insurance companies will have to publicly justify premium hikes but will also support the state insurance exchange’s authority to ask insurance companies to cite their reasons behind arbitrary rise in premiums rates…

Out of the $200 million, $149 million is available as baseline grant to the states to 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. Approximately $50 million will be available to the qualifying states in the following ways:

a)      WORKLOAD grants, worth $22.5 million will be given to states with a larger population and more insurers.

b)      PERFORMANCE incentives of about $27.5 million will be awarded to states that have or will enact the authority to approve/disapprove hike in premium rates.

Explaining the importance of these funds on the effective implementation of the Act, Steve Larsen, the Director of the Center for Consumer Information and Insurance Oversight, which administers the rate review grants, has said, “The Affordable Care Act provides States new resources and tools to curb rising costs, as well as to help make sure 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 Act is helping to protect consumers from the worst insurance industry abuses.”

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