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$4 million federal grant awarded to Nevada to analyze, justify health insurance increases

By ThisIsReno

By Sean Whaley, Nevada News Bureau: U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius today announced Affordable Care Act grant awards of $3.96 million to Nevada to help fight what she calls unreasonable premium increases.

Today the agency also released a new report entitled Rate Review Works detailing how previous rate review grants are fighting premium hikes and helping make the health insurance marketplace more transparent.

“We’re committed to fighting unreasonable premium increases and we know rate review works,” Sebelius said. “States continue to have the primary responsibility for reviewing insurance rates and these grants give them more resources to hold insurance companies accountable.”

Companies offering health insurance coverage in Nevada could not immediately be reached for comment on the grant award.

Nevada is one of more than two dozen states challenging the constitutionality of the Affordable Care Act. But until the legal questions are resolved, Gov. Brian Sandoval has said Nevada has to plan for the implementation of the law.

U.S Department of Health and Human Services Secretary Kathleen Sebelius.

As of Sept. 1, the Affordable Care Act requires health insurers seeking to increase their rates by 10 percent or more in the individual and small group market to submit their request to experts to determine whether the rates are unreasonable. The act also requires insurance companies to publicly justify unreasonable premium rate increases. These provisions will bring greater transparency, accountability, and, in many cases, lower costs for families and small business owners who struggle to afford coverage, the agency said in a news release.

The Affordable Care Act provides states with $250 million in Health Insurance Rate Review Grants, $48 million of which has previously been awarded to 42 states, the District of Columbia and five territories. As outlined in the new report, these grants and other state rate review efforts are already making a difference in Nevada:

– Nevada has added actuarial support that has brought a new expertise to its rate review analyses. From Jan. 1 through March 31, 17 of the 30 rate filings received were disapproved.

– The grant also inspired legislative initiatives to broaden Nevada’s review authority to include small group health plans, the agency said. Assembly Bill 74, signed into law by Sandoval, gives the state Insurance Commissioner authority over rates for small group PPOs.

The agency said the grants awarded today will help to create a more level playing field by improving how states review proposed health insurance rates and holding insurance companies accountable for disclosing information about unjustified rate increases.

Nevada is proposing to use the grant funds in the following ways:

– Expand the scope of rate review: Nevada no longer exempts Group PPOs from filing requirements and Nevada will develop a plan to implement the necessary changes in policy and procedure to add small group rate filings to the rate review process.

– Improve rate filing requirements: Nevada implemented a “zero tolerance” policy as of July 1, requiring insurers to either resubmit an incorrect filing or correct minor errors through post-submission updates.

– Improve transparency and consumer access: Nevada plans to host consumer outreach meetings across the state in late 2011. Nevada will post weekly updates of rate filings under consideration and review on its website within five days of receipt, and links to posted rate filings will remain valid for three years. Nevada will also post rate filings from Aug. 1, 2010 forward and public comments addressing proposed changes on its new website.

– Hire new staff: Nevada will create 3 new positions with the grant funding.

– Improve information technology: Nevada recently launched a website dedicated to the Divisions’ rate review activities. The new site will serve as a primary consumer access point for health benefit plan rate filing information and posting of the Division’s analysis summary upon disposition.