$200 million offered to fight premium hikes as insurers take issue with review regulations Posted: February 28th, 2011

The U.S. Department of Health and Human Services (HHS) is accepting applications from states for $200 million in grant funding. The money is being offered to help state agencies review health insurance premium increases and implement a proposed federal rule requiring greater accountability for what are deemed "unreasonable premium hikes," according to an HHS news release.

While all states will be eligible to apply for $149 million in grants to meet baseline goals of transparency and openness in the rating process, $50 million will be reserved for states with large workloads or those deemed high performing. Of those funds, $22.5 million will go to states with large populations or large numbers of health insurance companies. Another $27.5 million will go to states that have, or plan to enact, the authority to disapprove rate hikes.

Meanwhile, industry group America's Health Insurance Plans (AHIP) has submitted a letter to HHS disputing the use of a 10 percent threshold to determine "unreasonable" health insurance hikes. Under the proposed HHS regulations, the 10 percent figure will be used by states to determine whether a rate filing warrants closer review.

According to AHIP, the use of a specific numeric benchmark ignores factors such as geographic differences in pricing and costs associated with the implementation of health reform provisions.