WASHINGTON — President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday.
The president’s bill 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 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.
Officials said they envisioned the provision taking effect immediately after the health care bill is signed into law.
The legislation would call on the secretary of health and human services to work with state regulators to develop an annual review of rate increases, and if increases are deemed “unjustified” the secretary or the state could block the increase, order the insurer to change it, or even issue a rebate to beneficiaries.
The new rate board would be composed of seven members, including consumer representatives, an insurance industry representative, a physician and other experts such health economists and actuaries, the White House said. The board’s annual report would offer guidance to the public and states on whether rate increases should be approved.