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New Plan Outlined here

Looks like the roll out has begun:

President Obama will be adding a new element to the bill that wasn't in any of the passed legislation, a Health Insurance Rate Authority, which is meant to block increases in premium hikes that are deemed "unjustified" by a panel of players in the health/medical sector as well as the Sec. of Health and Human Services.

WASHINGTON – President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said.

Not being an expert on health policy, I don't know how effective a measure like this could become. But what it sounds like is that it takes the practical mechanism of the public option, which is to essentially hold down premiums through govt. competition, and to use the HIRA to force down premiums instead. If you've been paying attention to the debate over Anthem Blue Cross this past week, you would have noticed how the govt. essentially blocked their rate increases, albeit not indefinitely. That is a promising sign. Also, when this becomes law, the insurance company would be legally prohibited from such a rate hike.

The legislation would call on the secretary of health and human services to work with state regulators to develop an annual review of rate increases, and if increases are deemed “unjustified” the secretary or the state could block the increase, order the insurer to change it, or even issue a rebate to beneficiaries. States would be eligible for a portion of $250 million in grants finance premium review and approval.

So who is on the HIRA?

The new rate board would be composed of seven members, including consumer representatives, an insurance industry representative, a physician, and other experts such health economists and actuaries, the White House said. The board’s annual report would offer guidance to the public and states on whether rate increases should be approved.

Such a model has supposedly been in effect for 25 states where insurance commissions can regulate rates. Anyone have any info on how those states are doing? Senator Feinstein has been drawing up similar legislation for California in lieu of the Anthem Blue Cross outrage and Obama's plan seems to be co-opting the idea nationally.

In clear political terms, the proposal Obama is putting out will put Republicans on the defensive as they will either be forced, on camera, to defend why they are against holding insurance companies accountable or embrace an Obama idea. Of course, making Republicans defend indefensible positions on record has become the mantra of the Obama administration for 2010 (Read: Deficit Commission). Oh, hello Chicago Politics...where have you been?

And while they will likely resist any expansion of federal authority over existing state regulators, [Republicans] will also face a tough balancing act at Thursday’s summit meeting to avoid appearing as if they are willing to allow steep premium hikes like those by Anthem.

Senator Feinstein, in an interview on Sunday night, pointed to the $12.2 billion in profits reaped by the five biggest private insurers in 2009. “When you look at the profits in ’09,” she said, “up 56 percent over the year before, you begin to understand that something is going on that is not in the interests of the American people.”

I would love to see Republicans try to defend that.

As for the rest of the plan, it will be essentially the same elements of the House and Senate bills (i.e. national exchanges for individuals and small business markets, pre-existing condition prohibitions, excise tax, etc.)

And it looks like reconciliation seems like the only path left, unless there is some sort of breakthrough. Still, our spineless congressional leaders are fretting a measure THAT IS IN THE CONSTITUTION!!!

Yes, I know Harry Reid said he will use it within 60 days, but you can never know with Harry.

Even many Democratic lawmakers are skeptical that the complex health care legislation can be moved through using that parliamentary maneuver.

So don't let them back away!. Not NOW! Not when we are literally thisclose to passing health care reform. Let's keep the pressure on!

Thankfully, the Obama administration seems to have gotten the message that they need to go on offense and that is what this week and this summit will do.

We'll see what happens. This is high stakes poker...so GAME ON!

Originally posted to ye ye ye on Sun Feb 21, 2010 at 06:42 PM PST.

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Comment Preferences

    •  tipped and recd for the diary, but not, (3+ / 0-)
      Recommended by:
      Lynwaz, homogenius, GiveNoQuarter

      unfortunately, for the plan, which looks very small-bore and is by no means a substitute for a robust PO.

      " unfortunately, insurers compete mainly by trying to excel in the art of denying coverage to those who need it most" - Paul Krugman

      by output on Sun Feb 21, 2010 at 07:04:07 PM PST

      [ Parent ]

      •  Regulating health insurance premiums (6+ / 0-)

        ...is a good idea.

        But it is not enough....

        The reason why health insurance premiums are so high is because the health insurers are greedy, sure, but it is also because there are no COST CONTROLS on what health providers and drug companies charge.

        A system that regulates insurance prices, but does not set limits on heath industry pricing will not work.

        •  conditions in a market that will be fundamentally (3+ / 0-)
          Recommended by:
          homogenius, wsexson, WisePiper

          The bill would create a new Health Insurance Rate Authority, made up of health industry experts that would issue an annual report setting the parameters for reasonable rate increases based on conditions in the market.

          unchanged, except for the part about the captive customers. and of course, there's no indication on whether the board's findings will be binding. and annual reports, even if they do keep costs in line, might not be of much use to someone who has been stuck with an unreasonably high premium for months before any sanctions are applied. This thing - a commission, by any other name - sounds like pure-D bullshit.

          Flame away.

          " unfortunately, insurers compete mainly by trying to excel in the art of denying coverage to those who need it most" - Paul Krugman

          by output on Sun Feb 21, 2010 at 07:33:46 PM PST

          [ Parent ]

        •  This is somewhat complicated... (3+ / 0-)
          Recommended by:
          ferg, WisePiper, output

          ...but it is necessary to understand how messed up the entire health care system is before jumping to a conclusion that simply regulating the health insurance industry will keep rates down.

          When people go to the doctor or the hospital they get medical care, tests and drugs. These heath care providers (places like Sutter Health in California) then charge the insurance companies for the services. Also, people are prescribed drugs which they then go to the pharmacy to buy. The pharmacies then charge the insurance companies for the drugs which they get from the drug companies.  

          Let's talk about the services. Sutter Health is a huge system of health providers and it negotiates rates for the services with the insurance companies that have access its system of providers. Sutter has the power to force the insurance company to pay it a a lot of money because the insurance company wants the business. The insurance company has little leverage with the health provider, because the only thing they can do is leave their system and people freak out when they try to do that since people want to stay with their own doctors.

          So that's what makes insurance so high. It is not just the insurance company. It is also the health care provider.

          Likewise drug companies have all sorts of schemes to get doctors to prescribe the most expensive drugs even if generics are just as good, and the health insurance industry has very little leverage over the drug companies prices. This is mostly because. people don't care how much the insurance company has to pay for the drugs if they don't have to pay for it personally.

          So, the system is completely broken. Regulating insurance prices is great, but unless there is regulation of the rates that health providers can charge and the prices that drug companies set for their products it will not stop the increase in the cost of health care and since the cost of health care most be covered by insurance, the associated increase in insurance rates.

          Maryland  sets the price of all charges that health providers can charge and it works. Something like this needs to happen in addition to any regulation of health insurance premiums.

        •  Actually, the frontline health providers (2+ / 0-)
          Recommended by:
          MediaFreeze, Catskill Julie

          not the source of high health care costs.  The health insurance companies not only underpay them, but reject claims for no good reason, delay payments, require hours of paperwork to get payment.  Sure, there are some providers making too much.  But the primary docs -- family practitioners, internists, pediatricians -- are not among them.  When you look at the years of training it takes to become a doctor, the amount they make -- compared to a financial analyst with a B.A., is awful.  
          While I don't disagree that some of the high costs are due to charges from providers (and certainly from the charges of the pharmaceutical companies), our health care costs would drop by 20% or more simply by removing the insurance companies from the middle, by removing their profits from the costs of health care.
          There are cost controls on providers -- they come from the insurance companies limits.  And they are very stringent.  That hasn't lowered U.S. expenditures on health care at all -- just shifted the money to the pockets of the insurance company CEOs and shareholders.

          If, in our efforts to win, we become as dishonest as our opponents on the right, we don't deserve to triumph.

          by Tamar on Sun Feb 21, 2010 at 08:21:19 PM PST

          [ Parent ]

          •  There is a lot of blame to go around... (0+ / 0-)

            ...and you are correct that the individual primary doc is not the among the guilty. They have a nightmare maze of paperwork and insurance company administrative foolishness to deal with that is an incredible burden and horrendously inefficient and costly. However, a lot of this is also due to the fact that the big providers, like Sutter, use their leverage to negotiate special deals with the insurance companies and as a result the insurance companies "cost shift" onto the smaller groups and primary docs, basically shafting them and reducing (in some cases dramatically reducing) what they get for the same services that the big guys provide. What this does is make it very hard to operate outside of a larger system, so if forces docs into the clutches of a Sutter or even an HMO.

            I am not saying that insurance companies are not guilty of everything you say. But it is a completely screwed up system where insurance companies reimburse different providers very different rates for the same services that makes it impossible to reform one component without addressing the systemic problem.

        •  the health care bill (1+ / 0-)
          Recommended by:
          Tamar

          already regulates insurance companies through the exchanges. that said, more oversight can't hurt.

          but we do need a public option without a doubt.

      •  HIRA ? I'm skeptical (3+ / 0-)
        Recommended by:
        MindRayge, GiveNoQuarter, output

        This sounds a lot like  our Public Utility Commission in Ohio - & what it does is (usually) rubberstamp the utilities' requests for rate hikes. So much depends on who is on the board...& assuming at some point Repubs will be in charge again, they'll pack 'em up with FOICs (Friends Of Insurance Cos.) & the premium rates will just go up up up.

        I sure wish they could come up with something more convincing than this pos plan...

        •  Well they don't just rubber-stamp it (2+ / 0-)
          Recommended by:
          homogenius, GiveNoQuarter

          It is more like First Energy wants 5 percent more for their profit. They ask for a 15 percent increase. The PUC says - no way in hell - you are only getting 10 percent and not a penny more. The extra 5 percent can now go for more lobbying and kickback and contributions.

          You are right though, this isn't a plan element that will pass the smell test with anyone that has seen such "consumer" protection commission in action.

  •  This appears to confirm (13+ / 0-)

    an earlier diary. This seems like excellent news to me, and the previous diary is scrolling away fast.

    Enthusiastically recommended.

  •  Wonder what the criteria would be? (15+ / 0-)

    This is the kind of "regulatory" body that would be entirely toothless under a Republican president.  Even under Democrats I have a hard time believing it would really rein in private health insurers.  Would it make them cut their profits?  Would it do anything that would hurt their stock prices?

    Color me skeptical.

  •  keep the bureaucrats and give us the P-Option (2+ / 0-)
    Recommended by:
    Dean Barker, maggiejean
  •  This is Feinstein's plan actually (2+ / 0-)
    Recommended by:
    ferg, maggiejean
    Glad to see Obama adopting it.

    This would have to be done separately from the bill actually because it wouldn't make it through reconciliation since it has NOTHING to do with the budget.

    Obama 1/10: "We don't quit. I don't quit."

    by Drdemocrat on Sun Feb 21, 2010 at 06:53:40 PM PST

  •  Now we are talking -- (8+ / 0-)

    I sit here in canada and wonder how on earth this proposed private insurance based system might work. I kept looking for a way to control rates. Subsidies would only encourage rate increases. Competition might help a bit, but I feared collusion. a public option might help, but it might need to run at a loss to drive down prices since it might well attract those that think they might really need to be covered (and I so no indication that it would since there was never any scream about unfair competition only about 'government takeover').

    This is how you control prices. Directly. Just like in done in may jurisdictions with utility rates (since utilities are at least quasi-monopolies offering an essential service).

    This is an important piece of the puzzle. Go for it.

    We have only just begun and none too soon.

    by global citizen on Sun Feb 21, 2010 at 07:00:11 PM PST

  •  This won't fly (1+ / 0-)
    Recommended by:
    Pluto

    Regulating rates may be constitutionally questionable and the Insurance Lobby is way too powerful to standby and allow this.

    --Mr. President, you have to earn my vote every day. Not take it for granted. --

    by chipoliwog on Sun Feb 21, 2010 at 07:02:12 PM PST

    •  What are you talking about? (1+ / 0-)
      Recommended by:
      bwren

      Utilities are regulated in this manner.

      Conservatives are not necessarily stupid, but most stupid people are conservatives. John Stuart Mill

      by Micheline on Sun Feb 21, 2010 at 08:24:21 PM PST

      [ Parent ]

      •  insurance is not a utility (0+ / 0-)

        The Rethugs have already promised a vociferous legal challenge to any universal health care regime including challenging mandates and rate regulation/caps.

        --Mr. President, you have to earn my vote every day. Not take it for granted. --

        by chipoliwog on Sun Feb 21, 2010 at 09:45:10 PM PST

        [ Parent ]

        •  Insurance sells across state lines which the (0+ / 0-)

          Federal government has power to regulate as stated in the constitution.

          Conservatives are not necessarily stupid, but most stupid people are conservatives. John Stuart Mill

          by Micheline on Mon Feb 22, 2010 at 04:42:50 AM PST

          [ Parent ]

          •  Actually, no it doesn't (0+ / 0-)

            Insurance companies maybe headquartered out of state, but the policy you buy is enacted in your state and regulated by state authorities.

            So far, that isn't changing.  The Republicans happen to want that to change perhaps not realizing that that would give the Federal government more power to regulate their activities and rates.  But perhaps the Republicans envision being able to swamp the control and influence of state regulators with this action.

            Gone would be state requirements for instance to cover reasonable hospital stays for maternity deliveries e.g. a return to the practice of booting a mother the same day she delivers.

            --Mr. President, you have to earn my vote every day. Not take it for granted. --

            by chipoliwog on Mon Feb 22, 2010 at 09:29:24 AM PST

            [ Parent ]

            •  That is still interstate commerce. (0+ / 0-)

              Conservatives are not necessarily stupid, but most stupid people are conservatives. John Stuart Mill

              by Micheline on Mon Feb 22, 2010 at 03:53:26 PM PST

              [ Parent ]

              •  no not in its present form (0+ / 0-)

                --Mr. President, you have to earn my vote every day. Not take it for granted. --

                by chipoliwog on Mon Feb 22, 2010 at 06:09:52 PM PST

                [ Parent ]

                •  Yes it is (0+ / 0-)

                  I live in Florida and if I file suit against a  company based in another state for a number of damages, I have to sue in federal court because of issue regarding diversity. This is a perfect example of interstate commerce. Moreover, Mccarren Act is an example of federal gov't granting the states the power to regulate insurance.

                  Conservatives are not necessarily stupid, but most stupid people are conservatives. John Stuart Mill

                  by Micheline on Mon Feb 22, 2010 at 07:25:10 PM PST

                  [ Parent ]

    •  Regulating insurance rates is hardly (2+ / 0-)
      Recommended by:
      bwren, American in Kathmandu

      constitutionally questionable any more than regulating electricity or gas rates is  . .  

  •  this is weird (2+ / 0-)
    Recommended by:
    Lynwaz, Pluto

    I prefer a neoliberal solution to price increases (introduce a government-run competitor to insurance companies and let the market work its magic.)

    Obama and Feinstein are pushing bureaucratic price controls.

    And my position is the wacky liberal one.

  •  This is a good step (1+ / 0-)
    Recommended by:
    seanwright

    I like it.

    I'm an idealist without illusions. - John F. Kennedy

    by Coldblue Steele on Sun Feb 21, 2010 at 07:07:10 PM PST

  •  This is just for a talking point at the sit down (0+ / 0-)

    Probably something Obama will negotiate away for concessions from the GOP on another matter.  

    Politics is like playing Asteroids - You go far enough to the left and you end up on the right. Or vice-versa.

    by Jonze on Sun Feb 21, 2010 at 07:10:23 PM PST

  •  Basically the Dems bring up the price gouging... (2+ / 0-)
    Recommended by:
    mwm341, pistolSO

    and offers this and the GOP shoots it down and then they're asked what is their solution for the skyrocketing prices and they'll say "tort reform".  

    Basically trying to box the GOP in.  

    Politics is like playing Asteroids - You go far enough to the left and you end up on the right. Or vice-versa.

    by Jonze on Sun Feb 21, 2010 at 07:12:20 PM PST

  •  the Obama-way always negotiate from a position of (0+ / 0-)

    weakness....if you are really weak...well then maybe they would not be so scared of you.

  •  Sounds good to me (1+ / 0-)
    Recommended by:
    alba

    Let's get this done. Pass the Bill.

    "We don't throw the first punch, but we'll throw the last." Barack Obama, October 6, 2008

    by jessica69 on Sun Feb 21, 2010 at 07:12:38 PM PST

  •  Oh I can just hear the Republican's, LOL. nt (0+ / 0-)

    Expose the lies. Fight for the truth. Push progressive politics. Save our planet. Health care is a right, not a privilege.

    by lighttheway on Sun Feb 21, 2010 at 07:13:25 PM PST

  •  The only way to keep costs down (7+ / 0-)

    in a private insurance system is to make sure the system is highly regulated like Switzlerland as well as have a public option to keep.

    This is a step in the right direction.

    Obama 1/10: "We don't quit. I don't quit."

    by Drdemocrat on Sun Feb 21, 2010 at 07:14:41 PM PST

  •  The official WH plan (4+ / 0-)
    Recommended by:
    tmo, 3goldens, jessica69, Lady Libertine

    I'm an idealist without illusions. - John F. Kennedy

    by Coldblue Steele on Sun Feb 21, 2010 at 07:32:10 PM PST

  •  This article does not outline the plan. (2+ / 0-)
    Recommended by:
    Coldblue Steele, Limelite

    It does introduce a new board that will be proposed in the President's plan (which will be released tomorrow) and that board will oversee premium increases for those buying insurance in the private market.  (In other words, this does not apply to those who have group insurance coverage through an employer.)  I encourage people to read the linked article at the top of the diary.  It's well worth the read even if it's not the outline of the plan to be released tomorrow.

    Trying to talk sense to crazy people never works.

    by 3goldens on Sun Feb 21, 2010 at 07:33:38 PM PST

  •  Sounds like a bad Idea (2+ / 0-)
    Recommended by:
    MediaFreeze, Senate Agenda

    Before I get attacked - let me state 1) I am a huge fan of Obama 2) I understand Insurance Issues 3) I have knowledge of Various Countries Health Care.

    To only way to deal with Insurance Companies is a) The Public Option b) Encouraging Competition.

    To Cap rate Increases is retarded, you can not force an Insurance Company to offer unprofitable Insurance products. Onerous regs simply shrinks capacity, creating less choice/competition. Consumers will be forced to go into more expensive plans elsewhere.

    Please understand that whilst I understand the needs of Insurance Companies - that it is blatantly obvious that the single payer approach, with individuals still having the right to purchase private Insurance is a massively better approach than the status quo or anything presently being discussed in Washington.

    •  The Public Option should (1+ / 0-)
      Recommended by:
      pistolSO

      definitely not be traded away for the HIRA.  Add the HIRA in there although I think what will happen is during Democratic Administrations, a hypothetical HIRA will be tougher on insurance companies while the opposite will happen during Republican Administrations since Republicans will be more insurance company friendly.  

      The Public Option (with subsequent improvements) is one of the main ways to hold insurance companies accountable allowing consumers true leverage over those vampires.  Keep up the pressure on the public option (or Medicare expansion).    

  •  It is essential if (4+ / 0-)
    Recommended by:
    bwren, Limelite, alba, Catskill Julie

    we allow people to buy insurance across State lines, a Republican demand. Otherwise, the Insurance Commissioner in Alaska, or Texas, or whatever State has the most insurance-friendly regulator, will set rates and rules across the nation.

    It is a good move. It calls Republicans on their bullshit fantasy that "allowing people to buy insurance across State lines" is really about the consumer, because they will still be able to buy from State to State, they just won't be stuck with the lowest common denominator Insurance Commissioner.

    Done with politics for the night? Have a nice glass of wine with Palate Press: The online wine magazine.

    by dhonig on Sun Feb 21, 2010 at 07:36:13 PM PST

  •  Is our journalists learning? (3+ / 0-)
    Recommended by:
    bwren, cartwrightdale, amk for obama

    I hope the Times reporter who wrote this:

    And while they will likely resist any expansion of federal authority over existing state regulators

    Can explain how the Republicans can be the champion of state regulatory sovereignty while simultaneously pushing the "sell across state lines" idea, which would effectively amount to a complete end to state regulatory power with respect to health insurers. Only in our liberal media can the Republicans be credited with defending something while completely working to undermine it.

  •  Can This Be Done Under Budget Reconciliation? (0+ / 0-)

    Without the details on President Obama's idea of a HIRA regulatory authority to limit private insurer rate increases, I hate to speculate.  But knowing a little something about Budget Reconciliation and the Byrd rule, I have significant doubts that setting up a regulatory authority could survive a Byrd rule challange.  Unlike the Public Option with a CBO score that reduces the deficit by $25 billion, the budgetary impacts of a regulatory authority are not yet clear to me.  Also, there is the stumbling block of the authoritity's set up being "incidental" to any budget impacts, which could also create a Byrd rule problem.

    I hate to be a "Debbie Downer" but I think the Public Option or Medicare Buy-In has a lot better chance of passage through budget reconciliation than an HIRA regulatory authority.

    This may just be a ploy to shift to the Public Option to control costs through competition once the Republicans reject the HIRA idea (which they will, since it is government price controls to them).  At least its a positive sign that the White House is definitely concious of the cost issue in mandating that people by insurance.  

    "Some men see things as they are and ask, 'Why?' I dream of things that never were and ask, 'Why not?"

    by Doctor Who on Sun Feb 21, 2010 at 07:59:19 PM PST

  •  Who Will Be on the HIRA When Republicans (1+ / 0-)
    Recommended by:
    Catskill Julie

    are in power?

    "ingratiation and access . . . are not corruption." -- Justice Kennedy (Citizens United v. Federal Election Commission, 2010)

    by Limelite on Sun Feb 21, 2010 at 08:36:15 PM PST

  •  Strictly regulated? Loopholes? (0+ / 0-)

    The proof is in the pudding, as this could be full of get out of jail free cards for AHIP.

    St. Ronnie was an asshole.

    by manwithnoname on Mon Feb 22, 2010 at 04:01:14 AM PST

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