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Federal Funds to Help Consumers Combat Insurers Roll into States

By Jane Norman, CQ HealthBeat Associate Editor

October 19, 2010 -- Consumers will get help resolving disputes with insurance companies and better information before enrolling in health plans under $30 million in grants awarded to states Tuesday by the Department of Health and Human Services (HHS).

HHS Secretary Kathleen Sebelius announced the grants to 35 states, four territories and the District of Columbia at a news conference at HHS. She said that for years, consumers and small businesses have been left to fend for themselves in the complex and often confusing insurance market. But help is on the way via the new health care law.

"When insurance companies rejected a claim people felt they had nowhere to go," Sebelius said. Now states will use the grant money to educate consumers about their new rights and consumer protections under the law (PL 111-148, PL 111-152).

Karen Pollitz, deputy director for consumer support at HHS's Office of Consumer Information and Insurance Oversight, said many of the programs receiving awards will be at state insurance departments. Congress wanted to provide direct assistance to consumers who have complaints or need to make appeals, Pollitz said. Many of the grantees already have track records recovering money for their state residents, she said.

"These programs are also important because they'll have a sentinel effect," she added. The law requires grantees to collect data and report on problems consumers are encountering. "That will help us to strengthen oversight" and dig deeper into the sources of common problems, she explained.

"Because there will be a watchdog in the marketplace I think everyone will be a little more accountable and a little more careful to provide the coverage consumers are entitled to," she said.

For example, New York will receive $1.76 million to "provide consumer assistance to at least 8,000 New Yorkers with their enrollment in coverage and/or their navigation and disputes with insurance carriers," said an HHS statement. The money will also pay for expanded walk-in services and public education about the state's high-risk pool.

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