Obama takes aim at insurance industry

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Published: February 22,2010

Tags: healthcare, healthcare reform, insurance

WASHINGTON — President Barack Obama is making a fresh attempt to rescue his health care overhaul by proposing a measure that would allow the government to deny or roll back egregious insurance premium increases that infuriate consumers.

Coming just days before a White House health care summit with congressional leaders of both parties, Obama’s legislative proposal, which will be unveiled later Monday, likely represents the president’s last chance to salvage his signature issue.

A White House official, speaking on condition of anonymity because details have not yet been officially released, said the insurance rate proposal would give the federal Health and Human Services Department — in conjunction with state authorities — the power to deny substantial premium increases, limit them, or demand rebates for consumers.

In this initiative, the administration seemingly is playing directly to the same kind of public skepticism that has endangered the medical care system remake all along. Health care reform was a front-burner issue for Obama and majority Democrats in Congress until a little known Republican, Scott Brown, shocked the political establishment last month by defeating Massachusetts Democrat Martha Coakley in a special election to choose a successor for the late Sen. Edward Kennedy.

Recent premium hikes of as much as 39 percent sought by Anthem Blue Cross in California have given Obama a new argument for his sweeping health care remake, stalled in Congress since Democrats lost their 60th Senate seat in a special election last month in Massachusetts.

The proposal for tighter oversight of insurers is modeled on legislation proposed by Sen. Dianne Feinstein, D-Calif., and will be part of a broader plan the White House plans to post on its Web site at 10 a.m. Monday, ahead of Thursday’s health care summit.

Until now, Obama has argued what should and should not be in a health care overhaul, but the legislation itself has largely been left up to majority Democrats in Congress to draft. It’s the most detailed proposal yet to come from Obama.

His plan is expected to require most Americans to carry health insurance coverage, with federal subsidies to help many afford the premiums. Hewing close to a stalled Senate bill, it would bar insurance companies from denying coverage to people with medical problems or charging them more. A tax on high-cost health insurance plans objected to by House Democrats — and labor unions — would be scaled back. The expected price tag is around $1 trillion over 10 years.

Republicans have already served notice they’ll continue to oppose it. They want Obama to start over with the goal of producing a more modest bill that tries to curb costs and helps small businesses and people with health problems secure coverage.

The summit at Blair House, the White House guest residence, will be televised live on C-SPAN and perhaps on cable news networks. It represents a risky and unusual gamble by the administration that Obama can save his embattled overhaul through persuasion — on live TV.

Brown’s victory in Massachusetts reduced the Democrats’ majority in the Senate to 59 votes, one shy of the number needed to knock down Republican delaying tactics.

Senate Minority Leader Mitch McConnell said Sunday he would participate, but insisted Obama and congressional Democrats would be wrong to push the bills they wrote in the House and Senate.

“The fundamental point I want to make is the arrogance of all of this. You know, they are saying: ‘Ignore the wishes of the American people. We know more about this than you do. And we’re going to jam it down your throats no matter what.’ That is why the public is so angry at this Congress and this administration over this issue,” said McConnell, R-Ky, speaking on “Fox News Sunday.”

Thursday’s meeting will take place nearly a year after Obama launched his drive to remake health care — a Democratic agenda item for decades — at an earlier summit he infused with a bipartisan spirit. The president will point out that Republicans have supported individual elements of the Democratic bills.

Under the Obama plan, regulators would create a competitive marketplace for small businesses and people buying their own coverage. The plan would be paid for with a mix of Medicare cuts and tax increases. It would also strip out special Medicaid deals for certain states, while moving to close the Medicare prescription coverage gap and making newly available coverage for working families more affordable.

Oversight of insurance companies has traditionally been a state responsibility. The proposal for a new federal role calls for setting up a new seven-member Health Insurance Rate Authority that would monitor insurance industry behavior and issue an annual report. States that beef up their consumer protection programs would be eligible for a share of $250 million in federal grants.

People buying insurance coverage on their own would stand to gain the most, since big company plans are now exempt from state oversight.

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