Florida is set to receive $1 million in federal money to help crack down on ruthless health insurance companies that seek to hike premiums. Health and Human Services Secretary Kathleen Sebelius, announced on Monday that the monies which come from the Affordable Care Act funding, will help improve the oversight of proposed health insurance premium increases and help Florida take action against insures seeking unreasonable rate increases.
“The Affordable Care Act puts in place critical market reforms to improve quality and reduce the cost of health care for employers and individuals. Increased competition, lower insurance overhead, and better risk pooling in health insurance Exchanges in 2014 are expected to reduce premiums in the individual market by anywhere from 14-20 percent according to the Congressional Budget Office,” said HHS Secretary Kathleen Sebelius. “Between now and then, we will continue to work with States to ensure consumers are receiving value for their premium dollars and to avoid the kind of double digit premium increases seen recently. The State proposals approved today demonstrate the need and desire for new resources and tools to help them protect against unjustifiable premium increases.”
The Affordable Care Act provides States with $250 million in Health Insurance Premium Review Grants over five years to help create a more level playing field by improving how States review proposed health insurance premium increases and holding insurance companies accountable for unjustified premium increases. Applications for the first round of Health Insurance Premium Review Grants were made available on June 7.
The grants build on the Obama Administration’s work with States to implement the Affordable Care Act. Earlier this year, Secretary Sebelius called on certain insurance companies to justify large premium increases and encouraged State and local officials to obtain stronger health insurance premium review authorities under State laws. This increased scrutiny by the Administration and by several States has led to the withdrawal or reduction of several proposed health insurance premium increases that in some cases turned out to be based on faulty assumptions and data.
This grant will be used for the purposes detailed in the approved application. The following is a general summary of how Florida intends to use its funding:
* Pursue Additional Legislative Authority: Florida currently does not have review and approval authority over large group health insurance premiums or policies sold by out-of-State companies to Florida residents. The State will seek approval authority for these products during the 2011 legislative cycle.
* Expand the Scope of the Review Process: Florida will incorporate new types of health insurance premium filings and accommodate new information needed for the review of filings by companies who provide insurance both in and out-of-State.
* Improve the Review Process: Florida currently prospectively reviews individual and small group health insurance premium increases. The State will improve the quality of its review process by developing new rate filing requirements, including improved documentation of factors underlying a rate increase and more detailed information.
* Increase Transparency and Accessibility: Florida currently posts health insurance premium increase filings on its website. The State will develop a new electronic search tool to make it easier to access filings by creating a user-friendly, consumer-oriented webpage to display and explain rate increases.
* Develop and Upgrade Technology: Florida will incorporate additional reporting requirements and enhance website search functionality.
The Health Insurance Premium Review Grants are one element of a broad effort under the Affordable Care Act to reduce the unreasonable premium increases proposed by some insurers today. Additional resources from this $250 million program will be available in subsequent years to further strengthen State health insurance premium review procedures. Other statutory provisions designed to improve affordability include:
§ In 2011, the Affordable Care Act allows the Secretary of the U.S. Department of Health and Human Services to review justifications for unreasonable increases in premiums and make them public;
§ In 2011, insurers will generally be required to spend at least 80 percent of premium dollars on medical care services and quality-improvement activities and limit their spending on overhead, marketing, CEO salaries, and profits; and
§ In 2014, the Affordable Care Act empowers States to exclude health plans that show a pattern of excessive or unjustified premium increases from the new health insurance Exchanges.
The Affordable Care Act includes a wide variety of provisions designed to promote a high-quality, high-value, health care system for all Americans and to make the health insurance market more consumer-friendly and transparent. Some of the provisions that take effect by the end of next year, or are already in effect, include prohibitions on pre-existing condition exclusions for children; prohibition on lifetime dollar limits in all health plans; extended access to insurance for many young adults; and an unprecedented level of transparency about health insurance through www.HealthCare.gov.
To read more about how each State will use its grant funding, visit http://www.healthcare.gov/center/grants/index.html. For a national fact sheet visit http://www.healthcare.gov/news/factsheets/rates.html.
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