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Grants to Help with Consumer Protections

The Affordable Care Act created grant programs designed to help states oversee and enforce market reforms, and guarantee consumer protection for those using the new health care marketplace systems. To assist each state with its health insurance rate review processes, $250 million was made available to monitor insurance companies and prevent unjustified rate hikes beginning in 2014.

In 2015, the rate review led to roughly $1.5 billion in savings for consumers. The funds announced for 2017 are unused grant funding totaling $25.5 million from prior years. Each year, the unused portion of rate review grant funds remains available to plan and implement new insurance market reforms and consumer protections under Part A of Title XXVII of the Public Health Service Act (PHS). The first round of grants applied for are making their way to 22 states and the District of Columbia and you can see how each state plans to spend its grant money on the CMS website, which tracks these figures.

Approximately $21.6 million is being awarded to assist State Departments of Insurance in preparing and executing insurance market reforms and consumer protections. The remaining funds will be used toward other related expenses dealing with planning or implementing market reforms that extend across the health care industry for promotion, travel, equipment, supplies and indirect costs.

The Consumer Assistance Program Grants (CAP Grants) help to ensure that state laws, regulations, and procedures follow federal requirements as they evolve. The Obamacare marketplace is complex and continues to change as new phases begin and adjustments are made. Keeping up with providing new resources, education and accurate information to growing numbers of consumers requires many critical decisions for U.S. states and territories. Nearly $60 million will provide new programs for consumer assistance through direct support in answering health insurance questions. The funds go to state agencies and allow them to collaborate with non-profit organizations for additional support in helping consumers enroll, file complaints or appeals, obtain tax credits, understand their rights and actions, track problems and enforce regulations.

Each state needs funds to research, document, and analyze consumer questions and concerns relating to the required 10 minimum essential benefits that make up a qualifying health plan under the ACA. They also need to respond to these inquiries through additional manpower and facilities. The Department of Insurance is responsible for training staff to identify, assess and report issues regarding preventive services, equal benefits for mental health disorders and substance abuse, appeals processes, and the reduction in overall health insurance costs overall.

State Departments of Insurance are a critical component in making sure that health insurance providers are producing affordable plans that contain reasonable limits, and that costs that are justified. Companies must be proven financially stable so consumers stay protected. State regulations must also match new federal laws while addressing any discrepancies that appear.

Grants help each State Department of Insurance with incurred costs in promoting consumer education and awareness through industry professionals, associations and organizations; developing educational materials; updating their websites; presenting to stakeholders; participating in conferences; and purchasing advertising.

The grant award period runs from October 31, 2016, through October 30, 2018. Each grant will be treated as a project with a budget period of two years. Applicants each receive the baseline amount of $476,998 but are allowed to take less. Based on state population and the number of health insurance providers, a certain portion of funds is designated as “workload.” The remaining funds are earmarked for specified market reforms.

Consumer protection, quality service, and affordable products are the goals of the Affordable Care Act, and grants are built into the process. Individual states are integrating with the nationwide system and making the improvements necessary for consumers to understand the law, the system, insurance coverage options, and how to get the very best plans and service from their marketplaces. If your state spends its grant money wisely, then more tools will become available to simplify how you buy health insurance and how you receive information on upcoming changes.

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