This morning, House Majority Whip James Clyburn (D-SC) suggested that Democrats have enough votes to pass the Senate health care bill in the House if President Obama’s ‘fixes’ were adopted using reconciliation. Clyburn stressed that he had “not seen what the president’s proposals are” but said that the House could pass the bill with more than 219 votes if what he’s been hearing about the bill is accurate:

CLYBURN: Well, you know, I do believe that we got to 219 before. We got there with some people holding out for things we have not gotten in the Senate plan and other things.

TODD: You think there is more there.

CLYBURN: So I do believe there is more fertile soil today than there was when we first took this up.

Watch it:

The White House released its bill ahead of the bipartisan health care summit to present a unified Democratic front, but the real audience for the legislation aren’t Republicans (they’re not voting for health care), it’s Congressional Democrats who have resisted passing the Senate health care bill until the senate improved its affordability standards and increased the threshold on the excise tax. The Obama plan attempts to bridge the gap between the House and Senate proposals without adopting progressive measures like the national exchange and the public option. The plan also fails to endorse the House’s push for repealing insurers’ special anti-trust exemption.

The President’s moves to the left are not insignificant, but it’s not clear if it will be enough to sway reluctant progressives, angry at the White House for almost leaving reform at the alter in the aftermath of the Massachusetts election. So far, House Democrats have only acknowledged the release. The chairmen of the three House committees with jurisdiction over health policy, Reps. Charles Rangel (D-NY), George Miller (D-CA), and Henry Waxman (D-CA) issued a general statement praising Obama for “moving in the right direction.” House Speaker Nancy Pelosi (D-CA) also only went so far as to say that Obama’s plan “contains positive elements from the House and Senate-passed bills.”

Clyburn’s assessment is the only ringing endorsement for the plan in a sea of lukewarm support. Here’s to hoping it doesn’t get any colder.

Moments ago, the White House just released a $950 billion health care proposal bridging the differences between the House and Senate health care bills. Administration officials described the President’s legislation as “our take on how to bridge those differences” and explained that the language was informed by meetings between House and Senate officials. “We view this as the opening bid for the health meeting [on Thursday]. The President believes strongly that the meeting would be most productive were we to come to the table with one proposal that addresses these concerns as a pose to different proposals,” White House Communications Director David Pfeiffer explained.

The Obama plan maintains key elements of the Senate proposal but also incorporates stronger anti-fraud provisions and allows the federal government to review insurance rate hikes. On a call with reporters Pfeiffer insisted that the administration has not determined “on which path to move forward with”, but the bill’s substance suggests that Obama is hoping to bypass a prolonged-Senate debate and use the reconciliation process to fix the Senate bill and convince reluctant House progressives to pass the Senate legislation. “The American people deserve up or down vote on health reform,”Pfeiffer said. “We can get an up or down vote if opposition decides to take extraordinary steps of filibustering health reforms.”

But it’s unclear if progressive House members will embrace the new compromise. While the bill addresses House members’ affordability concerns, increases the excise tax thresholds and completely closes the donut hole in Medicare Part D, the legislation does not include a public option, retains the Senate bill’s state-based exchanges and keeps the start date for most reforms at 2014. (Obama’s plan also retains the Senate’s abortion compromise and most other core provisions).

The White House explained that it paid for its changes (which cost approximately $75 billion) by levying higher penalties on individuals and employers that don’t meet the legislation’s requirements, extending the payroll tax to unearned income, $10 billion in fees on branded pharmaceuticals, and increased savings from Medicare Advantage.

The proposal also eliminates the so-called Cornhusker kickback and provides full federal funding for Medicaid expansion for four years starting in 2014. Between 2018 and 2019, the federal government will pay 90% of the cost of the expansion and provide extra funds to states with generous Medicaid programs.

Here is how the Obama plan compares to the House and Senate proposals:

Responding to the Anthem Blue Cross rate hikes in California, President Obama will include a provision in the White House health care bill that would allow the federal government to review and deny excessive, unreasonable or discriminatory health insurance premium increases. Obama’s proposal is modeled on a rate review amendment offered by Sen. Dianne Feinstein (D-CA) during the Senate’s floor debate in December and revived as a stand-alone measure in recent weeks.

The final Senate health care bill already bars insurers with excessive rate hikes from participating in the insurance exchanges but this new provision would go a step further, federalizing the states’ traditional and somewhat uneven role in monitoring insurance rate increases. At least 25 states have some “form of a prior approve process for premium increases,” but state governments often lack the resources or political will to keep insurers in check. Obama’s provision is both politically and substantively significant. It protects consumers from unreasonable rate increases but also prohibits insurers from dramatically increasing rates during the elections of 2010 and 2012 or the period between the passage of comprehensive reform and implementation.

Democrats were worried that insurers would exploit the interim period to boost profits ahead of the new insurance regulations. The federal government’s new rate review powers could blunt at least some of the anticipated increases. Here is how rate review would work:

- Insurance companies would have to justify unreasonable premium increases.

- The Secretary could deny or modify health insurance rate increases that are found to be unjustified.

- The Secretary would determine whether states have the capability to conduct rate reviews.

- Establishes a Health Insurance Rate Authority to advise the Secretary. It will have seven members, including consumer representatives, an insurance industry representative, a physician and other experts like health economists and actuaries

Jonathan Cohn points out that “the key question, of course, is what constitutes ‘unreasonable‘” rate hike. According to the New York Times the Health Insurance Rate Authority, “made up of health industry experts that would issue an annual report setting the parameters for reasonable rate increases based on conditions in the market.” What’s ‘reasonable’ will vary from state to state.

In Arizona, rates were considered to be excessive if “they are likely to produce an underwriting profit that is unreasonably high.” “Considerations include loss experience, hazards, expenses, reasonable profit margins, trends, investment income from loss reserves, claims and earned premiums.” Oregon just passed a law giving consumers “30 days to comment on insurance company rate requests for individual, small group, and portability health insurance plans.” Insurers will be required to “separately report and justify increases and decreases of administrative expenses” and state regulators can consider an “insurance company’s overall finances, including profits, investment income, and surplus, when reviewing a proposed rate.”

It’s unclear if states with rate review have experienced smaller rate increases than states without such authority (state efforts are uneven and depend on how rate review authority is structured and enforced), but several states have successfully avoided sudden rate hikes. Regulators in North Dakota “were able to reduce 37 percent of the proposed rate increases filed by insurers,” for instance. “Maryland used their state laws to block a 46-percent premium increases” and New Hampshire regulators “were able to reduce a proposed 100 percent rate increase to 12.5 percent.”

Most rate regulation occurs in the individual health insurance market, where consumers are most vulnerable to sudden rate hikes. The presumption is that a large employer “should be sufficiently sophisticated and knowledgeable enough to negotiate rates with a carrier, and the state shouldn’t interfere with the process. These groups achieve bargaining power by leveraging their relatively large budget.” Here are efforts by Connecticut and Oregon regulators in the individual market in 2009 and 2010:

Since conservatives will surely claim that rate review is some kind of government take over of private industry or a burdensome new federal requirement for insurers, it’s important to note that states that have instituted rate review house profitable insurance companies and maintain competitive and vibrant markets. Families USA has more on that here.