As insurers fearful of health care reform announce massive pre-emptive rate hikes the Obama administration proposed today to give the government the power to block the increases. The plan was unveiled as the administration used the Internet to roll out comprehensive legislation to overhaul the nation's health care system.
The president's plan attempts to bridge the difference between House and Senate bills. Like the Senate and House bills, it ends insurers'ability to deny coverage to those with pre-existing conditions, it sets up more regulations on the private insurance market, it establishes insurance exchanges where consumers can compare prices and benefit packages, it defers the tax on so-called "Cadillac" plans for all workers until 2018, and provides federal subsidies to help people afford insurance. It does not include a public option.
By adding the proposal to give the government power to block rate hikes to the plans adopted in Congress Obama is riding national outrage over recent increases of up to 40 percent by profiteering health insurance companies.
The White House announcement today came just three days before a bi-partisan health care summit called by the president for Thursday.
The Obama plan would require the Secretary of Health and Human Services, working with state regulators, to conduct an annual review of rate increases. If the increases are deemed unjustified, the secretary or the state could block the increase, order the company to adjust it or even issue a rebate to customers for rate increases they have already paid.
The latest moves by the administration left GOP leaders in the politically uncomfortable position of having to defend the right of insurance companies to jack up their rates at will.
The first Republican to take the bait was Kevin Smith, a spokesman for House Minority Leader John A. Boehner, R-Ohio. "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," he said.
Not one Republican lawmaker has challenged increases now being put through by insurers. The president, in his most recent radio address, slammed Blue Cross in California for its 39 percent rate hike.
Republicans across the board are fearful that Thursday's health care summit will succeed in moving legislation forward and that it will expose their obstructionist role.
Michael Steele, the GOP chairman, has already attempted to portray the roll-out of the president's plan as a deal breaker for the bi-partisan summit. "It is baldfaced hypocrisy to continue hammering out the latest partisan backroom deal while preparing for a 'bipartisan' summit," he said.
The White House's plan amounts to a basic outline of the final bill which almost all reliable sources now say Democrats will try to pass using reconciliation, a procedural tactic that only requires Democratic votes in the Senate to pass it.
Labor and its allies note that Republicans want Democrats to give up on health care because it will "prove" the majority party is unable to govern. They say Republicans want Thursday's health care summit to fail because if it works the GOP, left without a talking point, will be standing out in the open exposed as the party of "no."
The White House has cleverly urged Republicans to post their bills online. Republican health care proposals, of course, are either non-existent or where there are proposals they fall far short of the Democrats' aim to insure 31 million additional people. The House Republican proposal, for example, would only add 3 million people to the rolls.
Republicans have attacked the White House for having included a "carve out for labor" in its plan. Union leaders won agreement from the president that provisions in the Senate bill that would tax so-called "Cadillac" insurance plans some workers get from employers would be put off and that workers in some high risk jobs would not have these plans taxed at all.
A report issued by the California Endowment and the Institute for America's Future last week shows that claims of favoritism toward union workers are false. The report says that the revisions negotiated by the labor movement would reduce the tax's revenue by $41 billion, of which 71 percent would accrue to nonunion workers.