Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


This week marked the three-month anniversary of the passage of health care reform. On Monday, Obama used the occasion to issue a harsh warning to health insurance executives against exorbitant rate increases. “[W]e’ve got to make sure that this new law is not being used as an excuse to simply drive up costs,” Obama thundered. He also unveiled what the White House calls a new “Patients’ Bill of Rights,” which highlights some of the new consumer protections and explains how insurers will be force to comply with the law.

Despite Obama’s tough rhetoric, the “Patients’ Bill of Rights” also makes it clear that the reach of the federal government will only go so far, even when it comes to the kinds of rate hikes the White House has condemned. The New York Times explains:

But for all of Mr. Obama’s browbeating, the new health care law stopped short of giving the administration the power to reject or limit rate increases. Instead, it established the annual reviews, starting next year, and makes available $250 million in grants to states to implement the review process.

States that accept the grants must recommend whether insurers with patterns of excessive pricing should be allowed to market policies through newly created exchanges, which will help individuals and businesses shop for coverage starting in 2014.

As it turns out, the White House had actually proposed giving the federal government the authority to reject unreasonable rate hikes, but the measure never made it into the final bill because of rules governing the reconciliation process. Sen. Dianne Feinstein (D-Calif.) has tried to reintroduce the proposal as a stand-alone bill, but the current political climate makes it difficult to imagine passing it any time soon. So the onus is now on the states to act, and it’s quickly becoming clear which states will take the initiative (and federal money) to do so. The White House points out that states like California, New York, and Maine are already taking the opportunity to strengthen their oversight and require more transparency from companies that want to raise rates. And it’s no surprise that the states with the most initiative are largely Democratic strongholds that already have a strong history of enforcing consumer protection measures. It’s the start of the great divide between red and blue states that will become increasingly apparent as more parts of the law are put into place.

There’s still some leeway for the federal government to assert greater authority and oversight over premium hikes, even in red states that are unwilling or reluctant to embrace the health law. The annual review process will require the federal government to work with state regulators to flag and scrutinize “unreasonable” premium increases. Though this will demand a measure of cooperation from state officials, the process could still create a more uniform standard for scrutiny and ramp up oversight in the twenty-odd states that currently don’t have a “rate review” authority to examine premium hikes. That said, the administration has yet to finalize the rules defining exactly what an “unreasonable” rate hike is. And the insurance lobby that the White House has so thoroughly villified is doubtlessly doing all it can right now to shape the rules that will govern them.

 

 

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate