Democrats tout healthcare reform's insurance rate review grants

"I was kind of surprised they decided to award the grants pretty much pro forma," Balber told The Hill. "Clearly some of these are lacking in real substance. We felt it would be a missed opportunity for HHS to basically award these grants across the board without looking at what the states intend to do with the money."

Sebelius said the awards announced Monday were a first step.

"States have the flexibility to use the funds in ways that make the most sense for that state," she said.

The grantees, according to HHS, are expected to use the money to:

• Expand the scope of health insurance premium reviews: Twenty-one states and the District of Columbia will expand the scope of their current health insurance review, for example by reviewing and pre-approving rate increases for additional health insurance products in their state.

• Improve the health insurance premium review process: All 46 grantees will require insurance companies to report more extensive information through a new, standardized process to better evaluate proposed premium increases and increase transparency across the marketplace.

• Make more information publicly available: Forty-two States and the District of Columbia will increase the transparency of the health insurance premium review process and provide easy to understand, consumer-friendly information to the public about changes to their premiums.

• Develop and upgrade technology: All state grantees will develop and upgrade existing technology to streamline data sharing and put information in the hands of consumers more quickly.

In addition, 15 States and the District of Columbia told HHS they are pursuing additional legislative authority to create a more robust program for reviewing or requiring advanced approval of proposed health insurance premium increases to ensure they are justified. Currently, only 26 states and the District of Columbia have the authority to reject a proposed increase that is "excessive, lacks justification or otherwise exceeds state standards," according to HHS. 

Only five states — Alaska, Georgia, Iowa, Minnesota and Wyoming — did not apply for grants. Those states are all over the map in terms of politics, geography and their ability to review rates; Minnesota, for example, already has one of the strictest rate review requirements in the country and may not have seen a need for the grants, according to Brian Webb of the National Association of Insurance Commissioners.

For states that don't strengthen their oversight, Sebelius warned, HHS could end up calling the shots. The healthcare reform law requires the review and justification of rate increases deemed "unreasonable" — a term still being defined by state and federal regulators — and while the law doesn't give HHS outright authority to deny the rates, it does strengthen its hand.

"Our first line will be to continue to encourage the other five (states) to analyze what they can and can't do to pull down some resources to help build additional capacity," Sebelius said Monday. "And in the event that they are not eager to do that, we will provide that kind of oversight here at the department."