“The Affordable Care Act puts in place critical market reforms to improve quality and reduce the cost of health care for employers and individuals,” Sebelius said in a press release. “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 to 20 percent according, to the Congressional Budget Office.”
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.
This grant will be used for the purposes detailed in the approved application. The following is a general summary of how Nevada intends to use its funding:
• Pursue additional legislative authority: There currently are no rate filing requirements for small or large group preferred provider organization (PPO) products. Nevada has prior approval authority for individual and HMO rates. The state will propose legislation in the 2011 session to give it prior approval authority for health insurance premiums for group health benefit plans. The Department of Insurance is currently required to keep actuarial data in rate filings confidential and it will seek legislation to make rate filings publicly available when filed.
• Expand the scope of the review process: Nevada will seek legislation to enable it to review small and large group health insurance premium filings.
• Improve the review process: Currently, all individual rates in Nevada are reviewed. The state will use grant funds to seek greater review authority and hire staff to accommodate review of all major medical health insurance products.
• Increase transparency and accessibility: Presently, Nevada does not provide access to filing information. The state will create a new position of consumer advocate for health insurance customers. This person will be able to seek hearings on health insurance premium filings requesting unreasonable increases and will represent the interests of consumers.
• Develop and upgrade technology: Nevada will collect data necessary to generate reports for the individual, small group and large group markets.
“States will use these grant dollars in the way that makes the most sense for their insurance consumers,” said Jay Angoff, director of the office of consumer information and insurance oversight. "As we continue to implement the new health insurance reform law, we will continue to work with states to ensure they have the tools they need to ensure the stability of the marketplace, keep costs low and provide consumers with increased transparency, choice and quality they need to make the best health care decisions for their businesses and families."
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 today by some insurers.
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.