Insurance-rate regulation dropped from proposal

March 19, 2010 at 12:00a.m.

McClatchy Newspapers

WASHINGTON

A Democratic plan for new federal power over health-insurance rates was dropped Thursday from the final health-care bill, squeezed out by the way the Democrats are pushing the bill through Congress.

Rolled out with fanfare just weeks ago, the Democratic plan was a response to double-digit rate increases proposed by health- insurance companies in California and elsewhere.

It was first proposed by Sen. Dianne Feinstein, D-Calif., then picked up by President Barack Obama.

It would have given the federal government the power to reject proposed rate increases. It also would have allowed the secretary of health and human services to order insurance companies to give back part of premiums if the government decided that the companies spent too much of their incomes on salaries or advertising.

Obama had hoped to put the proposal into the health-care measure before the House of Representatives that is designed to change the Senate-passed legislation to make it more amenable to House Democrats.

However, the Democratic plan to send the fix-up bill first to the House and then to the Senate depends on using “reconciliation” rules to get it past a Republican filibuster in the Senate.

A White House aide said Thursday that the Senate parliamentarian had ruled that the new insurance-rate regulation proposal didn’t qualify to be included in that bill under rules for reconciliation.

In particular, the parliamentarian ruled that the proposal ran afoul of the Byrd Rule, named for Sen. Robert Byrd, D-W.Va., which requires that anything passed under reconciliation — and therefore exempt from the threat of filibuster — be limited to budget measures.

Obama plans to try again later, the aide said.