19 Of The 22 States Suing Government Over Health Reform Willing To Accept Grant Money From Law

Today, the Department of Health and Human Services announced that 45 states and the District of Columbia “will receive $1 million in grant funds to help improve the review of proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes, and ensure consumers receive value for their premium dollars.” The $46 million are part of the $250 million in rate review grant dollars authorized by the new health care law. “Money is going out the door today and tomorrow,” HHS Secretary Kathleen Sebelius said on a conference call with reporters. “We got the proposals in from the states, we essentially gave them a laundry list of possible applications, figured out that these 45 states and the District met that criteria. So we’re sending out the resources right away.”

According to HHS, “15 States and the District of Columbia will pursue additional legislative authority to create a more robust program for reviewing or requiring advanced approval of proposed health insurance premium increases to ensure that they are reasonable” and “21 States and the District of Columbia will expand the scope of their current health insurance review.” “If the states that have said they are seeking legislation, get that legislation passed, a very large majority of states” would have the authority to review and deny unreasonable grants,” Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight said on the call. Currently, “just 19 states have complete authority to do this in both the individual and small-group markets.”

“We are very optimistic that these first batch of grants are going out the door with almost full participation, very thoughtful proposals. So people are seriously interested in expanding capacity on the ground, expanding technical expertise,” Sebelius said. They are, indeed. According to my count, 19 of the 22 states that are suing the federal government over the constitutionality of the health care law applied for the grants. Below is a sampling:

— ARIZONA: “The State intends to improve their filing review process by hiring an actuarial consultant to review 95% of submissions for compliance and make recommendations regarding whether filings are unjustified or excessive.”

— VIRGINIA: “Virginia will expand the information required to be submitted with rate filings and will develop a procedures manual for the review of rate filings.”

— FLORIDA: “The State will expand the scope to include large group and out-of-State products.”

This disconnect highlights the growing gap and differing approaches of state politicians running for office and state insurance commissioners and health departments, many of which are moving ahead with implementation of reform, despite the rhetoric about repeal and nullification.

Just five sates — Alaska, Georgia, Iowa, Minnesota and Wyoming — did not apply for the rate review grants, meaning that insurers operating in those areas would have to justify premium increases to HHS. “I think that the fallback position is, here at the Department, there will be a requirement — based on some definitions that are still under discussion — that companies will have to justify unreasonable increases to the Department of Health and Human Services,” Sebelius said. “I think the more that can be done on the ground, understanding the markets locally, understanding the solvency issue which are an important piece of the puzzle, the better off we are.” Indeed, while the health law gives the federal government the authority to review premium increases, only states are able to reject or deny unreasonable hikes.