Obama Plan Would Monitor Insurance Premiums For the first time, President Obama has issued his own version of a comprehensive health care bill. Most of its provisions are drawn from the Senate's health care bill. There is, however, a new wrinkle: a federal panel to regulate insurance premiums. The panel could reject any premiums it sees as unreasonable.
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Obama Plan Would Monitor Insurance Premiums

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Obama Plan Would Monitor Insurance Premiums

Obama Plan Would Monitor Insurance Premiums

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STEVE INSKEEP, Host:

On a Tuesday morning, it's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.

RENEE MONTAGNE, Host:

We now know what the president wants in a health care bill. For the first time in the year-long debate, Mr. Obama released his own vision of what a health overhaul would look like. The White House called the president's blueprint, unveiled yesterday, an opening bid for a summit meeting this week with Congressional Republicans and Democrats. It largely follows the health care bill passed in the Senate, as NPR's Scott Horsley reports.

SCOTT HORSLEY: Much of the money in the president's $950 billion health care plan would pay to extend health insurance to those who don't have it now. But President Obama is also trying to sell his plan to the majority of Americans who do have coverage.

BARACK OBAMA: Even if you've got health insurance, what's happened to your premiums lately?

HORSLEY: At a town hall meeting in Nevada last week, Mr. Obama 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: No matter what your situation, I guarantee you your costs have gone up at least double digits over the last year.

(SOUNDBITE OF APPLAUSE)

OBAMA: 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.

HORSLEY: What the president's plan would do is give the Health and Human Services secretary power to review insurance premiums and reject those deemed unreasonable. The idea was first proposed by California Senator Dianne Feinstein, who complains profits at the five biggest private insurers jumped more than 50 percent last year.

DIANNE FEINSTEIN: The big publicly owned medical insurance companies have gotten very greedy, and their profit margins are enormous.

HORSLEY: The health insurance industry argues that its profits represent a tiny fraction of overall health care spending. Karen Ignani, who heads the trade group, America's Health Insurance Plans, says it would be wrong to regulate insurance premiums without addressing the underlying costs of doctors, hospitals and pharmaceuticals.

KAREN IGNAGNI: This would be like capping the price automakers can charge consumers but letting the steel, rubber and technology manufacturers charge the automakers whatever they want.

HORSLEY: Many states already exercise some control over insurance premiums, but enforcement varies. Insurance Commissioner Sandy Praeger of Kansas says adding federal oversight could bring some helpful standardization. But, she doubts it would put a big dent in the average insurance bill.

IGNAGNI: Probably not, I think we're chasing the wrong tail here. It's really about health care costs.

HORSLEY: Praeger, who is past president of the National Association of Insurance Commissioners, says her state already takes a close look at insurance premiums anytime there is a big increase.

SANDY PRAEGER: In most cases, the companies have been able to justify them because of the economic situation. The book of business is probably getting sicker because healthier people are just dropping out.

HORSLEY: The president's plan, like the Senate bill, would require nearly everyone to carry health insurance. Health care analyst Elizabeth McGlynn, of the Rand Corporation, says young healthy customers would effectively subsidize insurance for everyone else.

ELIZABETH MCGLYNN: If you add into the mix, a fair number of people who have quite a bit lower expected health expenses, you're spreading across more people.

HORSLEY: The proposed overhaul would also create statewide exchanges, where McGlynn says individuals and small businesses could buy standardized health insurance policies.

MCGLYNN: In a way, because you can - you have a better sense of, you know, the price you're paying for insurance.

HORSLEY: Scott Horsley, NPR News, Washington.

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