President Obama is proposing that the federal government be given the authority to prevent health insurance companies from increasing their rates excessively as part of the comprehensive healthcare legislation he is supporting. Obama is working to reconcile the differences in the bills approved by the Senate and the House near the end of last year and to reset his healthcare agenda ahead of a bipartisan roundtable with Congressional leaders that is to be televised on February 25.

Neither of the bills already passed expands the government's regulation of insurance costs, and Obama seems to be introducing the proposal in response to criticism of the 39 percent rate increase recently announced by Anthem Blue Cross of California and to encourage voters to see Democratic efforts to reform healthcare as intended to prevent insurers from obtaining excessive profits. Republican leaders are expected to oppose the expansion of the federal government into regulation currently performed by state authorities. Although Republican leaders have not formally accepted Obama's invitation to the televised debate, on February 21 Senate Republican leader Mitch McConnell said that he would participate, along with other members of the Republican delegation.

A trio of veteran insurance regulators say President Obama is overreaching with his proposal to give the federal government the authority to reject health insurance rate hikes. In recent interviews, Kansas Insurance Commissioner Sandy Praeger and Oklahoma Insurance Commissioner Kim Holland said that while states are in a better position to determine insurance needs, they would welcome federal advisory help. Pennsylvania Insurance Commissioner Joel Ario said that the federal government could help set standards for state regulators to use when weighing hikes. "Health insurance is very localized and states already have a number of tools to monitor rates," Holland said in defense of state insurance regulation. "Overall, I think state regulators do a good job."

Obama to Urge Oversight of Health Insurers' Rate Increases (NY Times 2/22/10)

State Regulators Criticize Obama Health Plan (Kaiser Health News 2/22/10)

February 26, 2010