HEALTHCARE Q&A — Not Starting From Scratch

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WASHINGTON, D.C. — President Obama on Monday offered his plan for revamping the healthcare system.

Does the president’s plan replace the bills that had passed in the House and Senate?

No. The plan is separate from the House and Senate bills that passed last year, but it follows the framework of the Senate bill — with some suggested changes borrowed from the House version, plus tweaks that blend elements of both bills.

The purpose of the proposal is not to start over with a new healthcare blueprint, but rather to restart the healthcare debate that stalled after the Democrats lost their supermajority in the Senate last month.

Will the Obama plan be submitted to Congress?

It’s more likely to be used as a guide to negotiations over modifying the existing legislation, because the partisan atmosphere on Capitol Hill would make it very hard to start the legislative process from scratch again.

What are the key differences between this plan and the bills in Congress?

One new item is a proposal to create a Health Insurance Rate Authority to assist and oversee state efforts to review "unreasonable rate increases" and "unfair practices" in the industry.

What would this authority do?

The Obama proposal is vague on details, but some have suggested that the authority is being modeled off a bill that was proposed last week by Sen. Dianne Feinstein (D-Calif.) in response to news of insurance premium increases as high as 39% in her state.

Feinstein’s proposal would require insurers to justify rate increases, and would give the federal government the authority to reject or modify "unreasonable" rate hikes.

Don’t states already regulate health insurance?

States do regulate insurance, but the outcome is uneven and not always effective. In many states, regulators cannot evaluate and reject rate increases before they take effect. In California, other forms of insurance are regulated this way, but health insurance is not.

Auto insurers, for example, are required to submit increases to a regulatory body for approval before they can start charging customers higher premiums. Consumers can request hearings to examine rate increases of more than 7%.

This regulation has saved California drivers $62 billion since 1988, according to Consumer Watchdog, a consumer advocacy group.

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Consumer Watchdog
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