Kelsey Snell/Medill News Service
Phyllis Menke, City Clerk of Fonda, IA, Michael McRaith, director of the Illinois Department of Insurance, Karen Ignagni, president and CEO of America’s Health Insurance Plans and Grace-Marie Turner, president of The Galen Institue appeared before the Senate Committee on Health, Education, Labor and Pensions
WASHINGTON- Sen. Tom Harkin, D-Iowa, on Tuesday put his support as chairman of the Senate health committee behind a proposal by Sen. Dianne Feinstein, D-Calif., that would give the federal government authority over health insurance rate increases.
“This health care bill is not written in stone for eternity,” Harkin said. “It was a bill passed here and we will be modifying and changing it as we go forward. This is another modification we need to make to the bill.”
The new health care law requires insurers to explain “unreasonable” premium increases but otherwise does not provide for federal regulation of insurance rates. The Feinstein plan would allow the federal government to step in.
“This is the only recourse that remains,” Sen. Feinstein told members of the Senate Committee on Health, Education, Labor and Pensions during the first hearing on health care premiums and costs since President Barack Obama signed the health care reform bill into law. “I’m very worried this is a glaring loophole.”
Though Feinstein said she has no commitments yet to move the bill forward, she said that waiting to act allows insurers to increase rates before provisions in the new law take effect in 2014.
“The Republicans will try to get premium increases and they will blame health care reform,” she said.
However, Karen Ignagni, president and CEO of America’s Health Insurance Plans, testified that she opposes Feinstein’s bill, saying the law offers safeguards by placing regulatory authority for insurance rates with the states.
“We think it is important to let all of this proceed,” she said. “The changes should be allowed to work to see where we are.”
Several senators, including Sen. Lamar Alexander, R-Tenn., argued that the Feinstein proposal and the entire health care debate address the wrong issues.
“To me this is another Washington takeover of responsibility,” he said “We’re barking up the wrong tree.”
Other senators also raised the issue of health insurance providers posting large profits. Harkin paused mid-hearing to note that UnitedHealth Group Inc., the largest U.S. medical provider by sales, had just increased its projected 2010 earnings forecast and that its net income for the quarter rose to $1.19 billion.