Insurers reject Obama's proposal for a rate-hike review panel

Feb 24 2010

The health overhaul plan unveiled Monday by President Barack Obama puts the heat on insurers by requiring federal oversight of increases in health insurance premium rates, something the industry has strenuously objected to.

The Wall Street Journal: "The plan, which Mr. Obama hopes to include as part of his health-care overhaul, would create a new agency to be called the Health Insurance Rate Authority to review premium increases and block those it deemed unreasonable. That would add federal supervision to a patchwork of state insurance regulators that examine premium increases." Insurers said that could be ruinous for their businesses, since the costs of health care -- doctors and hospitals -- could continue to rise unfettered (Johnson, 2/23).

The Associated Press/Los Angeles Times: "This would be like capping the price automakers can charge consumers but letting the steel, rubber and technology manufacturers charge the automakers whatever they want," said Karen Ignagni, the CEO of American's Health Insurance Plans. The Blue Cross and Blue Shield Association said it would be hazardous to separate federal premium reviews from the state responsibility to ensure companies have enough money to pay claims (Murphy, 2/22).

Politico: "This is the latest salvo in a yearlong volley between the insurance industry and Democrats at both ends of Pennsylvania Avenue. Every time public opinion flags, Obama and his congressional allies train their sights on those well-recognized villains at the big insurance companies." But, in this case, an insurer, Anthem Blue Cross, helped spark the feud by announcing a premium rate increase in California of up to 39 percent (O'Connor, 2/23).

Kaiser Health News: "State insurance regulators said President Barack Obama goes too far with his proposal Monday to give the federal government new power to reject health insurance rate increases." However, two said they could use advisory help from Washington, and one suggested that federal officials could help standardize rate oversight (Galewitz and Appleby, 2/22).

NPR: "Many states already exercise some control over insurance premiums, but enforcement varies. Kansas Insurance Commissioner Sandy Praeger of Kansas said adding federal oversight could bring some helpful standardization. But she doubts it would put a big dent in the average insurance bill" (Horsley, 2/23).