By Nicholas Johnston and Kristin Jensen Feb. 22 (Bloomberg) — President Barack Obama will endorse new rules giving the government power to stop insurance-rate increases it deems unreasonable, as part of a plan to revamp the health-care system, an administration official said. Obama’s proposal, which would give the U.S. Department of Health and Human Services the new authority over insurers, is to be unveiled today. The move is a reversal from months of the White House leaving details of the largest U.S. medical overhaul in more than four decades largely up to congressional Democrats. The president has invited Republican leaders and top congressional committee members to a Feb. 25 meeting at Blair House, across from the White House, calling on them to release a “comprehensive bill” of their own that would cover millions of uninsured Americans and reduce rising medical-care costs . Obama on Feb. 20 urged lawmakers to attend the meeting in “good faith” as he decried “jaw-dropping” insurance-rate increases that he said underscore the need for remedies. On Feb. 9, he singled out for criticism proposed insurance premium increases by a California subsidiary of Indianapolis- based WellPoint Inc . that the company later delayed. In his weekly radio address Feb. 20, he said customers of Anthem Blue Cross of California recently “opened up their mailboxes to find a letter” containing news that the company wanted to raise premiums “by an average of 25 percent, with about a quarter of folks likely to see their rates go up anywhere from 35 to 39 percent.” Widening Concern Obama also expressed concern about similar rate increases that either have been put into effect or are proposed in Michigan, Kansas and Maine. “The bottom line is that the status quo is good for the insurance industry and bad for America,” he said. Obama’s legislative proposal will include the creation of a government panel to set rules for reasonable rate increases, the official said on condition of anonymity ahead of today’s announcement. The proposal, first advanced in legislation introduced by Democratic Senator Dianne Feinstein of California, would create a seven-member Health Insurance Rate Authority to make recommendations on rate reviews and approvals. The members would include consumer representatives, an insurance industry representative, a physician, and experts in health economics, actuarial science, and related fields. It would publish an annual report on insurance-market behavior, the official said. Delegating to States Under the proposal, the health secretary could also delegate enforcement to a state insurance regulator to block the premium hike or order its modification, the official said. Obama is disclosing his legislative proposal on health care after legislation that would require all Americans to have insurance stalled in Congress amid Republican opposition. Republicans have criticized the Democratic legislation, saying it’s too expensive at about $1 trillion over 10 years, that it unfairly forces people to obtain insurance, and will lead to a government takeover of health care. Senate Republican leader Mitch McConnell of Kentucky said yesterday the American people “really want to us to shelve this bill and start over.” “It strikes me as rather arrogant to say, ‘Well, we’re going to give it to you anyway, and we’ll use whatever device is available to achieve that end,’” McConnell said on the “Fox News Sunday” television program. To sidestep Republican opposition, the Democrats may use a procedure called reconciliation, which would require just 51 Senate votes to pass. That may pose a problem because Senate rules require reconciliation measures to only deal with revenue and spending issues, which would mean the bill might have to be stripped down. House and Senate lawmakers were days away from overcoming differences and melding their bills when the Jan. 19 special Senate election in Massachusetts deprived Democrats of the 60th vote they needed to get the new compromise through that chamber. Now, lawmakers are looking to Obama to finish the job. To contact the reporters on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net Kristin Jensen in Washington at kjensen@bloomberg.net .
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Obama Will Endorse New Rules to Limit Health-Insurance Premium Increases
