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Obama proposal targets insurance-rate increases

By Michael D. Shear and Dan Balz
Washington Post Staff Writer
Monday, February 22, 2010; A04

President Obama will call for new government power to regulate insurance-rate increases as part of comprehensive changes to the health-care system that the White House will unveil on its Web site Monday, senior officials said.

The proposal -- part of a package that a top official said will serve as a "starting point" for the bipartisan health summit Thursday -- comes as Obama has pointed to recent rate increases as evidence that his proposed changes are necessary.

Last week, Health and Human Services Secretary Kathleen Sebelius drew attention to a California health insurance company, Anthem Blue Cross, which planned rate increases of up to 39 percent. Obama mentioned the increases in his weekly radio address and at a town hall in Nevada.

The new proposal, which a White House official described Sunday night, would give Sebelius new authority to oversee, and potentially block, rate increases that are deemed unfair. It would be based, at least in part, on legislation initially proposed last week by Sen. Dianne Feinstein (D-Calif.).

The legislation would create a rate board, called the Health Insurance Rate Authority, which would broadly determine what increases are reasonable and justifiable. The seven-member board would have consumer, industry and medical representatives, as well as experts in health economics.

A top official said Sebelius would conduct an annual review of premium increases, and could work with state insurance officials to deny increases that were seen as excessive.

Republicans have criticized the president's health-care proposals as too reliant on government involvement. Obama's latest proposal drew similar fire.

"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," said Kevin Smith, a spokesman for House Minority Leader John A. Boehner (R-Ohio).

But it could prove tricky for Republicans: They must be careful not to be seen in an election year as siding with big insurance companies that are imposing drastic rate hikes on Main Street Americans.

Administration officials refused to provide many details about the proposal, but briefings are scheduled for reporters early Monday morning in advance of the posting of Obama's overall legislation.

Senior Obama aides also said the document will propose changes to the health-care legislation that passed in the Senate late last year, including lower taxes on expensive insurance plans and higher subsidies for working families to get health coverage. The changes could add up to $200 billion to the Senate bill's $871 billion price tag.

But the online materials will not address a controversial question -- whether Democratic leaders would use a parliamentary procedure known as "reconciliation" to try to pass health-care changes without the usual 60 votes in the Senate, officials said.

"This proposal aims to be a starting point for the conversation on Thursday," said a senior White House aide who spoke on the condition of anonymity because the document was not public yet. "We are going in with an open mind. It will not be very detailed. We are not dealing with process now, just substance."

Republicans have accused Obama of using Thursday's summit as political theater, and they had raised the prospect of not attending. But the Senate's top Republican promised Sunday that he and his members are "ready to participate," while accusing Democrats of being "arrogant."

"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,' " Senate Minority Leader Mitch McConnell (R-Ky.) said on "Fox News Sunday."

White House communications director Dan Pfeiffer said in response that "the upcoming meeting is an opportunity to get beyond oft-repeated and completely false talking points like these."

McConnell dismissed the idea of a GOP boycott, saying that "we're discussing the -- sort of the makeup of the room and that sort of thing, but yeah, I intend to be there and my members will be there and ready to participate."

He said, however, his party will continue to oppose Democrats if they try to use reconciliation.

"We believe that we think a better way to go is to, step by step, move in the direction of dealing with the cost issue, targeting things like junk lawsuits against doctors and hospitals, interstate insurance competition, small-association health plans," he added.

Health care dominated discussions at the National Governors Association for a second day Sunday. Four leaders of the organization issued a plea to Obama and Congress for states to have a greater voice in the deliberations over health care. But they had no plan to offer, nor did they ask to be included Thursday.

A White House official noted that Obama is meeting with the governors Monday.

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