Seeking to revive his stalled health-care legislation, President Barack Obama is proposing a new idea to address health costs, giving the federal government authority to block insurers from making premium rate increases.
The move raises the ante after two weeks of presidential bashing of rate increases including WellPoint Inc.’s decision to raise premiums for some California customers by as much as 39%. WellPoint has defended its price increase as unavoidable in light of rising health costs.
The president plans to include the idea in a legislative proposal to be released Monday, in advance of Thursday’s bipartisan health-care summit, a White House official said Sunday.
Administration officials have said Monday’s proposal would be an effort to bridge the differences between the health bills passed by the House and the Senate last year. The idea for new federal authority on premiums wasn’t in either bill, and is likely to generate opposition from Republicans arguing that it would give too much power to the federal government.
The 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.
A new seven-member Health Insurance Rate Authority, made up of industry experts, consumer representatives, a physician and others, would issue an annual report laying out what it viewed as reasonable rate increases. Those considered unjustified could be blocked by a federal board. Customers might even qualify for rebates.
Senate Majority Leader Mitch McConnell (R., Ky.) said on “Fox News Sunday” that Republicans intended to take part in Thursday’s televised summit, and he reiterated his call for Mr. Obama to scrap the Democrats’ bill.
