Today, the Center for Consumer Information and Insurance Oversight (CIIO) announced a new round of grants for states that will strengthen their ability to conduct premium rate reviews and roll back excessive increases. Community Catalyst and Consumers Union spoke at the press event about the importance of rate review to consumers.

“American families and small businesses have too often been the victims of premium rate shock,” said Community Catalyst policy director Michael Miller. “Typically, family income doesn’t jump 10 to 15 percent on an annual basis, the way insurance premiums tend to. Families incurring those rate increases year after year have difficult choices to make, and some of them end up without coverage as a result. So having an effective watchdog that can hold the insurers accountable is very important.”

States have often been overmatched by the insurers, so additional resources, particularly coming at a time when state budgets are still in recovery mode, will help level the playing field. The CCIIO resources are structured in a way that gives incentives to states to toughen up their review processes — more money will be available to states that have greater authority to deny rate increases.

Recent illustrations of the importance of rate review come from states such as California, Connecticut, Massachusetts and Rhode Island. One important change that consumer advocates are anticipating is that states will expand the opportunities for public review and public comment on proposed increases.

While rate review is not a silver bullet for rising health insurance premiums, it is part of the overall thrust of the ACA, which is to make sure that families are getting good value for their health care dollar. The increased scrutiny of rate increases is accompanied by many other initiatives to improve health care value for both premium payers and taxpayers, ranging from setting standards for Medical Loss Ratios, to reforming the delivery of care for people with chronic conditions.

The funding announced today is the second round of funding to enhance state review of premium increases. It does not actually hit the states until the first round expires in August. It will be interesting to see whether governors, some of whom have returned ACA funds or proclaimed their intention not to implement the ACA, will turn down resources that could save individuals and small businesses millions of dollars and instead align themselves as protectors of insurance industry profits.

– Kathy Melley, Communications Director