Sen. Dianne Feinstein (D-Calif.) is offering legislation to give officials the power to block health insurance rate increases.
Feinstein's proposal would change last year's healthcare law to give both federal and state government officials the ability to block rate increases. Federal officials have no such power now, and while states can block rate increases after a review, the California lawmaker's measure would give them more power.
The question of whether the government could block healthcare premium hikes was hotly debated during last year's healthcare debate. President Obama originally wanted the federal government to have the power to block rate hikes, and Feinstein last year put forward the idea that many Democrats initially supported.
Under the current healthcare law, rate increases higher than 10 percent must be reviewed by state or federal officials starting in September. The reviews are aimed at determining whether a rate hike is excessive or whether it is based on actual cost increases. The Department of Health and Human Services (HHS) has said it expects state officials to conduct most of these reviews.
Feinstein's proposal would toughen up this portion of the law substantially. Under her amendment, HHS or state insurance regulators would have the power to deny rate increases, force a modified rate increase proposal, or require rebates to consumers if an increase is deemed excessive.
It would also give the HHS secretary the discretion to decide which states can take these "corrective actions" on their own, and for which states these actions will be led by HHS itself.
Her amendment would give HHS the authority to make tough state reviews of insurance rate increases a condition of receiving federal grant money under the Patient Protection and Affordable Care Act.
It also seeks to broaden the scope of which rate increases would be reviewed. Under current law, "unreasonable increases in premiums for health insurance coverage" must be reviewed, which HHS defined as rate hikes of 10 percent or more.
But Feinstein would change this to require HHS to watch for "potentially excessive, unjustified, or unfairly discriminatory rates, including premiums." The bill does not define these terms, leaving the door open to government reviews of rate increases that are lower than 10 percent.
As Feinstein's amendment was just introduced Thursday, it is not clear yet whether the Senate will take it up next week.
Feinstein introduced stand-alone legislation earlier this year to give HHS the power to block rate increases.
"Health insurance premiums have been spiraling upwards at out-of-control rates, climbing 10, 20, even 30 percent each year," she said back in January. "Without further legislative action, health insurance companies will continue to do what they have done for far too long: put profits ahead of people."