• Health insurance companies hang onto their antitrust exemption Tuesday, December 22, 2009

    Health insurance companies would retain their exemption from federal antitrust laws under the health care reform bill that will be voted on in the U.S. Senate Thursday.  But most of the exemption, which was granted under the 1945 McCarran-Ferguson Act, was removed in the House version of the bill, and it would be one of the items to be negotiated in a conference committee.

    Sen. Patrick Leahy

    Sen. Patrick Leahy

    The McCarran-Ferguson Act puts regulation of the “business of insurance” under state jurisdiction.  According to a report by Robert Iafolla in the Daily Journal, the House version of the health care reform bill “contains a provision taking away insurance companies’ freedom from federal laws that prohibit bid-rigging, price-fixing and dividing markets up among competitors.  It would impact both health and medical-malpractice insurance companies.”

    The exemption from federal antitrust laws “has served the financial interests of the insurance industry at the expense of consumers for far too long,” according to Senators Patrick Leahy (D-Vt.) and Sheldon Whitehouse (D-R.I.).  Leahy is the author and Whitehouse a co-sponsor of the Health Insurance Industry Antitrust Enforcement Act.

    In a recent op-ed in the Washington Post, Leahy and Whitehouse wrote:

    It is only the health insurance industry’s enormous influence that has maintained this statutory exemption from federal antitrust laws since the McCarran-Ferguson Act was passed.  Meanwhile, patients and doctors have continued paying artificially inflated prices, and costs continue to rise at an alarming rate…ironically, health insurers have at times sued doctors and hospitals under the very rules from which they are exempt.

    David Balto, a senior fellow at the Center for American Progress, has written in The Huffington Post that repealing McCarran-Ferguson would be a “crucial step in ensuring that health insurance markets are competitive.”  He explained why he thinks it’s important to eliminate the exemption, even though it hasn’t played a role in many cases in the past:

    First, eliminating the exemption is important to protect competition after health care reform is enacted.  If the exemption is left untouched, after health care reform restores some level of competition to the health insurance market, the McCarran-Ferguson Act could be used to allow insurers to collude.  Second, eliminating the exemption and clarifying FTC [Federal Trade Commission] jurisdiction is important to enable the FTC to bring consumer protection actions against insurers.

    The elimination of the federal antitrust exemption was removed from the Senate bill in part because of the objection of Senator Ben Nelson (D-Neb.), whose support is needed to avoid a filibuster that could kill the entire bill.

    The insurance industry remains prepared to fight any further effort to repeal the exemption, according to a report by Arthur D. Postal on the industry news web site National Underwriter Property & Casualty:

    Blain Rethmeier, a spokesman for the American Insurance Association, said, “We’re glad our arguments against modifying McCarran have appeared to carry the day in the Senate, but the battle’s not over.”

    He added, “We expect this issue will heat up again next year, and it’s going to take the entire industry being united to oppose this in the final bill.”

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3 Responses to “Health insurance companies hang onto their antitrust exemption”

  1. McCarran-Ferguson was originally designed to empower both the federal government and the individual states so that they could act to prevent insurance companies from becoming abusive monopolies.

    How ironic that it has instead enabled the health insurance industry to achieve exactly the opposite result because the federal government has chosen not to pass legislation targeting insurance monopolies and the states have, for the most part, shirked their regulatory responsibilities.

    States haven’t gone after obvious Health Care Monopolies because their budgets are stretched too thin.

    All 50 States need to bring legal action collectively and the Federal Government needs to join the suit.

    Allegations of price-fixing, bid-rigging, exclusive sales contracts, local price cutting to freeze out competitors, and the dividing up of markets need to be full explored so we can get rid of our dysfunctional corporate health care system that’s choking the economy to death.

    On a macroeconomic scale it would return money to “our” pocketbooks and be more profitable for America. Less money out of our paychecks going to Joe Lieberman and Ben Nelsons friends at Well Point would be a boom for the economy. It would enable an increase in savings and investing as well as spending.

    Our money is being horded by the few to the detriment of the overall market place. That money needs to be returned to the tax payers in mass and available to stimulate the economy across a broad sector of markets as a whole versus the gain of a few Senators from Aetna named Lieberman and Nelson and the hysterically wealthy and tone deaf CEO’s they greedily represent.

    As conservatives like to say – enforce the laws on the books! It’s time to sue the Insurance companies regardless of the Healthcare Bill that Passes.

    Paul Burke
    Author-Journey Home

  2. Sue Baragona says:

    Just wondering. Is there any way a self-employed individual can file suit against a health insurer for raising premiums to extreme levels? A class action suit? The health insurer we have now has risen their rates yet again. Just curious. Would love to know if it could be done.

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