Feinstein bill would limit health insurance rate hikes at fed level

Sen. Dianne Feinstein (D-Calif.) wants to give the federal government the power to prohibit the kind of big premium increases that recently created a firestorm in her home state and among Democrats in Washington.

Citing a since-postponed plan by Anthem Blue Cross of California, a unit of the company WellPoint, to hike individual insurance premiums by as much as 39 percent this year, Feinstein announced Friday that she will introduce legislation that would create a federal authority to reject an insurer's annual premium increase and demand a lower hike, similar to the power many state regulators have.

"This is unconscionable. It places a huge burden on people who are already struggling in these tough economic times, including the estimated 700,000 Anthem Blue Cross policyholders in California," Feinstein said in a statement. "The insurance industry reaps soaring profits by piling massive financial burdens onto consumers."

Democrats have been pounding away at the health insurance industry in the days since Anthem asked California regulators to approve its increase.

The company and the insurance lobby insists that premium increases are the direct result of the escalating prices of the medical care they cover but Democrats counter that the companies are reaping high profits that belie their claims of financial difficulty.