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Feinstein Calls For National Health Insurance Regulator

One of the reasons many of us had so many problems with the health care legislation running through the Congress was that it lacked a federal overseer for the insurance regulations. As such, it punted those responsibilities over to the states, which have proven themselves unwilling or unable to enforce strict regulations. The design of the exchanges, from a state-based framework in the Senate bill to a more national framework in the House bill, alleviate some of this, but still the enforcement falls to the states.

Radical moderate Dianne Feinstein, of all people, has a solution to this – creating a Medical Insurance Rate Authority which would have say over insurer rate hikes at the federal level. It’s a small leap from this, intended to react to Anthem Blue Cross’ 39% rate hike in California, and a federal regulator of the health insurance industry with oversight over all regulations.

Sen. Dianne Feinstein (D-Calif.) said Friday that she plans to introduce legislation that would bar insurance companies from enacting health insurance premium rate increases that the Secretary of the Health and Human Services deems to be unjustified.

The bill would create a national Medical Insurance Rate Authority, which would be able to prevent such increases. Feinstein’s announcement follows reports that Anthem Blue Cross had intended to jack up premiums for certain policyholders in California by as much as 39 percent.

This should be enacted tomorrow. It leads to the fixing of one of the most glaring problems with the health care bill – its weak regulatory enforcement framework. We know from the financial collapse that federal regulators aren’t bullet-proof. But they exceed by leaps and bounds the state network of regulators, who are even more susceptible to industry capture.

Eric Massa said in his talk with supporters that this would be a good way to get Republicans on the record with their belief in the interstate sale of insurance. “We’ll agree to that, if there’s a federal regulator. A single federal regulator. A single payer federal regulator…” Obviously, there’s no way Republicans would agree to such a thing, since their purpose in seeking interstate insurance is to make the health insurance industry look like the credit card industry, where all the companies pile into one state with virtually no regulations and then leave everyone no choice but to buy that crappy product.

So it’s an open question whether this Feinstein bill will take off. But by centering it solely on insurance rates at first, perhaps she can back-door it into existence.

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David Dayen

David Dayen