Obama's health plan to target insurers' rates

President Obama will propose a regulatory crack down on insurers' rate hikes this morning, as the administration seeks to set the stage for a week-long push to reinvigorate the health care debate, The New York Times reports. The proposal comes as part of a new piece of legislation the president will unveil to merge House and Senate overhaul bills, and attract broader support. But, with the new insurer's regulations, "not included in either the House or Senate bills, Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California …" (Herszenhorn and Pear, 2/21).

The Wall Street Journal: "The [House and Senate] Democratic health bills already envision some role for the government to control premium costs, through new exchanges where individuals and small businesses could buy insurance. One version would prevent any insurer that raised rates beyond a level that the government deemed unfair from selling policies in the exchange. Private insurance companies are now regulated by the states, which review proposed rate increases. Under the Obama proposal, the federal Department of Health and Human Services would gain the power to review and block premium increases" (Meckler, 2/22).

Obama's plan would "set up a panel of experts" - including doctors, economists and other stakeholders - "charged with evaluating the healthcare market each year and determining what would constitute a reasonable rate increase," the Los Angeles Times reports. "Under the president's plan, rate increases outside the reasonable boundaries established by the board could be overruled by the [HHS] secretary, who would also have the power to require the insurer to revise its proposed rate changes or to order rebates for customers who overpaid" (Parsons, 2/22). 

Politico: "White House officials have already begun urging Republicans to post their bills on line as well - a clever tactic by the White House, because Republicans ideas for reform were spread across several pieces of legislation, or fell far short of the Democrats' goal of insuring 31 million uninsured Americans. The main House Republican proposal, for instance, would only cover 3 million more Americans" (Brown, 2/21).

The Washington Post reports that a spokesman for the House Republican leader John Boehner said, "At first glance, this seems to be an admission from the Obama administration that their massive government takeover of health care will, despite their promises, increase health care premiums for millions of Americans," since it suggests that insurers' rates would need to be actively controlled, even with reforms in place (Shear and Balz, 2/22). .

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.