February 22nd, 2010
08:02 AM ET
5 years ago

Obama wants government power to block excessive health insurance rate hikes

President Obama wants the government to have the power to block excessive health insurance rate increases.
President Obama wants the government to have the power to block excessive health insurance rate increases.




Washington (CNN) – The Obama administration will propose legislation that would allow the government to block excessive rate increases by health insurance companies, a senior administration official told CNN Sunday.

The official could not speak on the record because the White House has not yet formally announced the proposal.

Word of the administration plan comes as the White House was to unveil President Barack Obama's latest health insurance reform proposal at 10 a.m. ET Monday.

The House and Senate have passed their own versions of health care reform. The new Obama plan is expected to attempt to smooth the differences.

The proposal seeks to put "American families and small business owners in control of their own health care," the official said. It stems from discussions that have taken place with the House and the Senate, the official said.

Obama will propose changes that include eliminating the so-called "Nebraska deal," a provision worked in by Sen. Ben Nelson, a Nebraska Democrat, that exempts that state from paying increased Medicaid expenses, the official said.

The president also plans to include a series of measures proposed by Republicans to eliminate waste, fraud and abuse; and the introduction of a new provision to prevent arbitrary insurance rate hikes like a recent 39 percent increase in California.

A televised bipartisan discussion on health care reform is scheduled to take place on Thursday. Obama believes the discussion "will be the most productive if Democrats come to the table with a consolidated proposal" - what the president is releasing Monday, the official said.

Obama "hopes the Republicans will follow suit and come with their own unified proposal," the official said. "He'll be open to Republican ideas, and he hopes they'll be open to ours."

The legislation on insurance rates "would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators," the New York Times reported Sunday night, citing administration officials.

"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."

The officials said they believe such legislation would take effect immediately after a health care reform bill is signed into law.

– CNN's Ed Henry contributed to this report


Filed under: Health care • President Obama
soundoff (61 Responses)
  1. aproudmemberoftheunpatrioticmob

    Wouldn't it be nice if he would use that same government power to block the corrupt trial lawyers who gave and continue to give him and his liberal slime buddies, millions of dollars for their "campaigns." Or if he used it to block some of the stupid non-productive, gouging union contracts produced by his supporters in the slimy corrupt unions that give him and his liberal slime buddies, millions of dollars. That is the hypocrisy of liberalism.

    February 22, 2010 08:44 am at 8:44 am |
  2. Ken

    The more accurate title for this piece is "Obama Wants Goverment Power", It seems obvious that his objective is centralizing more and more power into governement. Thankfully, our system of government is working, and is preventing a short term majority from doing something that more and more voters are realizing will be devistating for the long term prospects of the nation.

    February 22, 2010 08:47 am at 8:47 am |
  3. jane

    However they do it, we need to have access to good health care at an affordable cost, and we need it yesterday !!!!!

    As it has been stated in our history, all persons should be entitled to four basic freedoms: freedom of speech, freedom to worship God however we choose, freedom from want and need, and freedom from fear. The private health care industry, with the blessings of government, has robbed us of the last two long enough!

    February 22, 2010 08:52 am at 8:52 am |
  4. Robert

    And the greedy capitalists who benefit from outrageous increases, and their conservative (Dem and Rep) cronies will now proceed to call him socialist and scare the American People from something that will benefit them.

    Runaway greed is what FDR warned the nation against with unbridled and unregulated Capitalism. Government has the responsibility to protect the citizens of this country from enemies both foreign and domestic. Greed is surely among those enemies.

    I'm tired of seeing people bash Obama for trying to protect the average Joe from the greedy corporate interests of this nation.

    Government in fact, is the only organization we have that can protect us.

    February 22, 2010 08:52 am at 8:52 am |
  5. Thank you Massachusetts

    and the American people want power to block excessive government control.

    February 22, 2010 08:55 am at 8:55 am |
  6. Ancient Texan

    This president is determined to have government run Heatlhcare one way or another. If you refuse rate increases on an insurance provider who is only making 5-6% net profit anyway, you successfully put the company out of business and have the government being the provider. And the administration knows this, it's just a back door method to control healthcare.

    February 22, 2010 08:56 am at 8:56 am |
  7. Jimmy James

    This is actually a idea I support. Here in Mass , auto insurance companies can't raise rates without proving they need to. It is why we don't have many insurance companies ( they don't like to show their massive profits). If they want to raise the rates 10%, they have to open their financial records and prove it. 99% of the time they don't get the approval to raise the rates because they made a huge profit the previous year and are actually ordered to lower rates.

    The federal government can do the same. Simply regulate them. If they want to raise any rates, they have to prove they are losing money. If they make too much money, they have to lower rates. Yes we are capitalists but the right to do business with the government has always been controlled by strict conditions and they can make healthcare care the same way. It's about time Obama stepped up to take charge. If he continues to step up like this and keep congress from lining their states pockets with bribes, he will actually get my support.

    February 22, 2010 08:58 am at 8:58 am |
  8. Lisa

    I just hope at the end of the day the public option is included in this plan.

    February 22, 2010 08:58 am at 8:58 am |
  9. so rich even obama couldn't hurt me but you middle class folk should worry

    that's nice. what about tax hikes what about the rapid growth of government what about the unions that are killing this country what about kevin jennings your school safety czar what about cap and tax what about picking a church for you and your family what about government officials and their rock star spending habits what about lobbyist working in the white house I gotta go make some money I could go on and on.

    February 22, 2010 09:03 am at 9:03 am |
  10. decent american

    "Obama wants government power..."

    that pretty much sums it up.

    you all that want gov't to provide everything for everyone do not stop and think about the strings attached to that. it is the "under my roof" situation, like when you are still living in your parents house after you grow up because you are dependent on them, you have to structure your life as THEY want coz you are dependent on them. dont you want to grow up and make your own life? govt control and provision stifles people, takes away the drive to grow the heck up.

    February 22, 2010 09:05 am at 9:05 am |
  11. Dick Cheney For President In 2012

    Memo to President Obama:

    IT'S THE ECONOMY, STUPID!

    On November 3, 2010 you will be shocked to have just seen the Democrats possibly losing both the House and Senate. And most likely you will still have no clue why it happened.
    Continued high unemployment, ballooning budget deficits and national security are the primary concerns of most Americans. Health-care reform as currently proposed IS NOT desired by the majority of of the population.

    February 22, 2010 09:06 am at 9:06 am |
  12. Kevin in Ohio

    Define "excessive" Obama. Is it ANY rate increase? Or will it take into consideration the fact that health care COSTS are growing far in excess of the rate of inflation?

    Quit attacking the symptoms, Obama...attack the root causes. Like excessive jury awards and attorney costs, and protective medecine being practiced as a result.

    February 22, 2010 09:07 am at 9:07 am |
  13. dora

    If there were a real public option, the insurance companies would have to keep their rates down to stay competitive. If you can't offer Americans a real alternative then by god, please start regulating this industry. Why does a industry that shows record profits for the previous year and the quarter feel the need to raise its rates 39%?
    #1 Because it can
    #2 Because how else would the CEO get $700,000,000.000 per year?

    February 22, 2010 09:08 am at 9:08 am |
  14. Carmelle

    Although this is purely to benefit the citizens of this country....republicans will cry socialism.

    He is not saying that you can increase your prices, he is saying don't take advantage of the families and small businesses who have to pay for your services.

    I thought Gvt was supposed to represent everyone, not just the ones who can lobby.

    February 22, 2010 09:08 am at 9:08 am |
  15. Costello Williams

    As logical as that sounds... The tea party/GOP will still not work with the president on this issue!

    February 22, 2010 09:08 am at 9:08 am |
  16. If I was crazy, I'd be a conservative too

    Some insurance companies have requested 39% and even 57% increases in premiums even though they made substantial profits last year. Watch the republican outrage against reining in outlandish actions of the insurance companies. Expect no help from the GOP to address reform for the American people. I believe that most republicans suffer from rectal cranial inversion.

    February 22, 2010 09:11 am at 9:11 am |
  17. HMC

    The president is trying to help all the people all the time but the party of NO and all their rhetoric and scare tactics scare people into thinking the opposite. To bad people don't realize that our problems started more than eight years ago now. I am so tired of the right wing have not gotten it yet, people don't care about taxes, taxes help us to get our infrastructure and our wars and our help to other countries going. Its the cost of health care and fuel and colleges that have hurt us through the last eight years, that needs to be addressed and the president is trying without the help of the right and with little help from the left...people open your eyes and start writing your senators and congressmen to stop going down the same path that has not worked for the last eight years. Give this president a chance to change what has not worked for something better for us all.

    February 22, 2010 09:12 am at 9:12 am |
  18. Fed Up

    I thought the Dems health care bill would take care of this. Why is extra legislation necessary? Could it be that they know their health care bill won't work? Interesting!

    February 22, 2010 09:17 am at 9:17 am |
  19. Bill from GA

    It sounds like a big, fat band-aid on a gunshot wound. But still, for example, here in Georgia our Insurance Commissioner, John Oxendine takes millions in campaign funds from insurance PACs, and it is legal. We may need over-site on weak state ethics laws.

    February 22, 2010 09:18 am at 9:18 am |
  20. Mark

    Well if he can do that, he needs to tell GM and Dodge to drop the price of their pick up trucks to less than $20,000 so more people can afford them. Ohh gosh I guess the UAW would have to accept salary concessions for that to happen and you know obama won't mess with the unions.

    February 22, 2010 09:21 am at 9:21 am |
  21. Sniffit

    whats next

    cap how much we pay for fuel, food, how about blocking the excessive price people want for their homes, then maybe i can move out of my parents house

    this guy should block his own excessive spending first.......and then worry about thsi stuff

    wage and price controls were put in place during the carter administration and we all know how wonderful that turned out

    February 22, 2010 09:22 am at 9:22 am |
  22. Carl R. Remoney

    When will Obama cool down his arrogant and Marxist ideas of himself as supreme leader of the US? He wants to run everything from his desk with the help of Twitter and
    Facebook? What a jerk! He's out of there as soon as we can. All of you who voted for him are responsible for this and remember, I told you so.....

    February 22, 2010 09:22 am at 9:22 am |
  23. Debbie from AZ

    Yes, Yes, Yes.... The President's proposals seem to be very sensible and reasonable, therefore the Republicans will disagree with all of them.

    February 22, 2010 09:23 am at 9:23 am |
  24. RTB

    Way to go Mr. President.

    I am feeling better already even if it is a foregone conclusion that the Republicans will try their silly do nothing, waste time strategy and attempt then to blame the administration for being too "whatever".

    February 22, 2010 09:23 am at 9:23 am |
  25. Chad

    It's not health reform without a public option.

    February 22, 2010 09:23 am at 9:23 am |
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