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June 2010 St@teside

Federal Money Available to Aid States in Rate Review

As outlined in the rate review provision in the Affordable Care Act which will soon take effect, insurers will be required to justify unreasonable premium increases to both state regulators and Health and Human Services (HHS) Secretary Kathleen Sebelius. In recognition of the key role that states will play in overseeing health insurance premiums and rate increases, Secretary Sebelius announced on June 7 the first round of $51 million in grants to aid states in the rate review process. Congress appropriated $250 million for the rate review grant program for federal fiscal years 2010-2014.

All states and the District of Columbia can apply for the $1 million-per-state grants.  Applications are due July 7, 2010. Secretary Sebelius expects the grants to be awarded late this summer. For a state to receive a grant it must submit a plan for how it intends to use grant funds to develop or improve its process of reviewing and approving, disapproving, or modifying health insurance premium requests.