Ben Nelson (D-NE), living up to his role as the great defender of the health insurance industry, is now leading the fight against the new Health Insurance Rating Authority that Obama proposed as part of his health care reform package (PDF). From Politico:

Nelson quietly urged Democratic leaders to reject Feinstein’s effort to include in the Senate health care bill a proposal empowering federal authorities to block high rate increases by health insurers, POLITICO has learned. And that irked Feinstein, who swallowed her pride and voted for the Senate bill even though she felt it shortchanged her state of California in some areas.

While I might be mistaken, from my studies of reconciliation and the Byrd rule, I’ve believe that this new Health Insurance Rating Authority would violate the Byrd rule because it is unlikely to be seen as affecting the budget.

If that is the case, having it survive in any reconciliation bill it would either require some hardball from Joe Biden or a vote of 60 senators to waive the Byrd rule. If Ben Nelson is a “no,” it is hard to imagine two Republican senators voting to protect the new federal agency.

Nelson’s opposition to the idea re-enforces my belief that Obama added it to his proposal for cynical political (and not policy) reasons. Knowing that it would never become law, the president surmised that the proposal would force Republicans to take a potentially difficult vote, but its likely exclusion from budget reconciliation would ensure that private health insurance companies were spared oversight by a new agency. If Obama is serious about keeping the insurance industry honest, he would push for mechanisms that would not violate the Byrd rule, ones that could pass with a simple majority as part of reconciliation, like a public option or Medicare buy-in.