The White House is providing states $22 million to enhance their state-level "rate reviews" to fight health insurance companies on premium increases, according to The Hill.
Here are six key points:
1. The government's $22 million boost is in response to possible premiums hikes of 10 percent or more this year. A Kaiser Family Foundation report found Affordable Care Act plans' premiums are expected to increase by 11 percent, on average, in 2017.
2. In rate reviews, payers are mandated to justify rate increases to their state insurance departments. Departments then have the authority to reject those rates they deem "unreasonable."
3. Through the funding, states can hire outside insurance experts who can better assess if rates are unjustified. The administration claims the grants are a means to "hold insurance companies accountable for unjustified hike."
4. The White House's grant boost is likely to incite harsh backlash from payers, who already have a strained relationship with the government and the ACA exchanges. Earlier this month, Blue Cross Blue Shield of North Carolina filed a suit against the federal government for not paying the insurer more than $147 million that BCBS claims the government owed under the ACA's risk corridor program.
5. Additionally, UnitedHealth announced earlier this year it was leaving several ACA exchanges in the wake of substantial losses. In June, California officials stated UnitedHealth was leaving the state marketplace, leaving 1,200 Californians to find new policies. UnitedHealth Group reported it filed paperwork to offer insurance plans in merely six state ACA marketplaces in 2017.
6. Blue Cross Blue Shield of Texas, the state's largest insurer, is seeking a nearly 60 percent price increase for its individual policies' rates. In 2014, the payer said it lost $416 million, with that figure increasing to $592 million the next year.
"Insurance commissioners are in a tough spot this year," said Larry Levitt, senior vice president for the Kaiser Family Foundation. "There will be enormous political pressure on insurance commissioners to scale back the hikes. But there's also — it's documented that many insurers have been losing money in the individual market."
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