TOPEKA — Kansas will spend most of a new $1 million federal grant to clamp down on health plan premiums to hire consultants to measure the problem, according to state insurance regulators’ documents.
The money, which is six times more than the $166,235 the state spends annually to review rising health plan premium costs, is part of $46 million that the U.S. Department of Health and Human Services recently awarded to 45 states and the District of Columbia to develop more-consumer-friendly regulatory systems for curbing escalating premiums.
Application papers that Kansas Insurance Department regulators filed to request the money that federal officials first offered last June, show that state officials plan to spend nearly 70 percent of the money, or $675,000, primarily for information technology and actuarial services consultants to help design the intended new systems, and another 13 percent, or $130,000, to share insurance data with related data banks maintained by the National Association of Insurance Commissioners and the Kansas Health Policy Authority.
The remainder of the money includes $90,000 earmarked for salary and other benefits for one additional full time and one part time employee and for additional equipment, supply and travel expenses, the application papers show.
Regulators believe that ultimately the gathering and management of significantly more actuarial information ultimately will provide health-plan buyers far more information about why their health plan costs are rising and what can be done to control those increases, said Bob Hanson, a Kansas Insurance Department spokesman.
“But right now, the question is ‘what is it possible for us to do?’ “ Hanson said.
A great part of what the department plans to spend money on now, and more later if the current one-year federal allocation is renewed in 12 months, is determining what processes must be put into place to accomodate new health care legislation, he said.
Kansas’ current regulation of health care premium costs is relatively limited. The state follows what’s known in the industry as a file-and-use regulatory philosophy; insurers are allowed to begin charging new rates for health care or other insurance policies as soon as they file the proper paperwork with the department and the new rates remain in effect unless regulators disapprove them afterward.
Health plan companies currently file about 250 sets of rates for new insurance plans in Kansas annually plus about 600 rate changes for existing plans. Once those are filed, regulators typically renegotiate about one third of the total to reduce what they consider unreasonable charges, the department estimates.