For the first time in the yearlong debate over health care, President Obama has released his own vision of what a comprehensive overhaul should look like. His blueprint, unveiled Monday, is described as an "opening bid" for this week's summit with congressional Republicans and Democrats.
The president's proposal is largely based on the Senate's health care bill, with some changes designed to win Democratic votes in the House. Obama also included a new wrinkle: The federal government would monitor insurance premiums, and reject those it sees as unreasonable.
"Even if you've got health insurance, what's happened to your premiums lately?" Obama asked participants at a town hall meeting in Nevada last week.
"No matter what your situation, I guarantee your costs have gone up at least double digits over the last year. They have doubled over the last decade. And they're going to more than double over the next decade if we don't do anything."
The president hammered away at the example of a California insurer — Anthem Blue Cross — that threatened to raise premiums by up to 39 percent this year. The White House says that kind of rate hike is just the tip of the iceberg.
Obama's plan would give the secretary of Health and Human Services the power to review insurance premiums and order refunds or reductions if the bills are too high. The idea was first proposed by Sen. Dianne Feinstein (D-CA), who complained that profits at the five biggest private insurers jumped more than 50 percent last year.
"The big, publicly owned medical insurance companies have gotten very greedy, and their profit margins are enormous," Feinstein said.
The health insurance industry argues that its profits represent a tiny fraction of overall health care spending, and says rising premiums are a function of health care costs.
To restrict premiums without regard to these underlying costs "would be like capping the cost automakers can charge consumers, but letting the steel, rubber and technology manufacturers charge the automakers whatever they want," said Karen Ignagni, president of America's Health Insurance Plans, an industry trade group.
Many states already exercise some control over insurance premiums, but enforcement varies. Kansas Insurance Commissioner Sandy Praeger said adding federal oversight could bring some helpful standardization. But she doubts it would put a big dent in the average insurance bill.
"I think we're chasing the wrong tail here," Praeger said. "It's really about health care costs."
Praeger, a past president of the National Association of Insurance Commissioners, said her state already takes a close look at insurance premiums whenever there's a big increase.
"In most cases, the companies have been able to justify them because of the economic situation," Praeger said. "The book of business is probably getting sicker because healthier people are dropping out."
That's the explanation that California's Anthem offered for its proposed increase. During the recession, more healthy people decided they could skip insurance, raising the average cost for insurance customers who remain.
And that's where other parts of the proposed overhaul come in. The president's plan, like the Senate bill, would require nearly everyone to carry insurance. Young, healthy customers would effectively subsidize insurance for everyone else.
"If you add into the mix a fair number of people who have quite a bit lower expected health care expenses, you're spreading [costs] across more people," said Elizabeth McGlynn, a health care analyst at the Rand Corporation.
The proposed overhaul would also create statewide exchanges, where individuals and small businesses could buy standardized health insurance policies.
"A lot of people believe that makes the sort of comparison shopping and, therefore, the competition among insurers more effective," McGlynn said.
Rand estimates these and other provisions of the overhaul could lower health care premiums by 2 to 4 percent over the next decade, reducing the need for the federal government to police those premiums.
The government's power to regulate premiums would be most important in the next few years, before those other provisions take effect.