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Health Insurance Industry Antitrust Enforcement Act


Guest Roman
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Asked on ABC's "This Week" if Obama would sign a bill that ended the antitrust exemption for the insurance industry and allow caps on premiums, Axelrod said, "We'll see what Congress does."

 

The McCarran-Ferguson Act, which gives states the authority to regulate the “business of insurance,” also exempts the business of insurance from the federal antitrust laws. There is no justification to exempt the insurance industry from the antitrust laws and federal government oversight.

 

The Health Industry Antitrust Enforcement Act of 2009 will repeal the exemption for health insurance and medical malpractice insurance companies. In the midst of the healthcare debate, where so many proposals contemplate how to bring added competition to the health insurance market, this legislation ensures that health insurers and medical malpractice insurers will at least be subject to normal laws of competition.

 

The Act only repeals the exemption for the most egregious forms of antitrust violations - price fixing, bid rigging, and market allocations. For those antitrust concerns that would otherwise fall under a litigation-intensive rule of reason analysis, the McCarran-Ferguson antitrust exemption still applies.

 

The Act will subject health insurers and medical malpractice insurers to the same good-competition laws that apply to virtually every other company doing business in the United States. The nation’s competition laws are powerful tools to ensure that consumer welfare is the benchmark for fair and accountable industry practices. Consumers benefit through lower prices, more choices, and better services.

 

The Act will not affect the ability of each state to regulate the business of insurance. The Act ensures that price fixing, bid rigging and market allocation are removed from the federal antitrust exemption.

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Senator Patrick Leahy (D-Vt.) Wednesday joined with Senate Majority Leader Harry Reid (D-Nev.) and Senator Charles Schumer (D-N.Y.) to announce that he will offer the Health Insurance Industry Antitrust Enforcement Act as an amendment to health insurance reform legislation. The bill, which Leahy first introduced in September, promotes competition in the health insurance and medical malpractice insurance industries that will benefit consumers. Providing antitrust exemptions for insurance companies has been anticompetitive and damaging to the American family and the American economy.

 

Jim Guest, a former Banking and Insurance Commissioner, Secretary of State and Secretary of Development and Community Affairs for the state of Vermont, and the current President and CEO of the Consumers Union, joined Leahy, Reid and Schumer at a press conference on Capitol Hill.

 

“During the Senate’s debate on healthcare reform, I will offer as an amendment the Health Insurance Industry Antitrust Enforcement Act, which will eliminate the antitrust exemption for health insurance and medical malpractice insurance companies and ensure health insurers compete rather than collude,” said Senator Leahy. “The American people deserve reform that serves their needs, not the special interests of insurance companies. Ending this cozy exemption is another way to strengthen consumer choice through a competitive marketplace.”

 

“There is no reason why insurance companies should have exemption from antitrust laws,” said Senator Reid. “It’s time to level the playing field for American health care consumers and make the insurance industry play by the same rules that other industries live by. Chairman Leahy has been a tremendous leader on this issue of fairness in the insurance marketplace and I am looking forward to working with Senators Leahy and Schumer to pass this amendment.”

 

“The health insurance’s antitrust exemption is sort of an accident of American history,” said Senator Schumer. “But today, with the health insurance industry one of the most highly concentrated in our entire economy, it is obsolete. We can’t pass effective health care reform if we don’t hold health insurance companies to the same standards as other American industries.”

 

“When it comes to competition, health insurance companies should not get a free pass,” said Guest. “It’s bad for consumers, bad for patients and bad for taxpayers.”

 

On October 14, Leahy chaired a hearing examining legislation to repeal the federal antitrust exemption for health insurance and medical malpractice insurance companies. Leahy introduced the Health Insurance Antitrust Enforcement Act in September. The bill would repeal the antitrust exemption. Leahy has been a longtime leader in the Senate to repeal the 1945 McCarran-Ferguson Act, and in the 110th Congress, introduced bipartisan legislation to fully repeal the Act.

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Concentration of economic power in the insurance marketplace presents serious dangers to consumers and health care providers alike. Monopoly and near-monopoly dominance provides opportunities for abuses by cartels that can engage in collusive price-fixing, bid rigging, market allocations and other anti-competitive behaviors.

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Guest cushing1

I agree completely. Removing antitrust exemptions would increase competition and prove beneficial to all of us. So would tort reform and elimination of the fraud which has infected Medicare and Medicaid since their inception.

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Guest R. C. Jackman

An important argument for the repeal of the antitrust exemption is that insurance regulation will be simplified. We won't need a ton of lawyers to interpret it. We won't have to worry about differences from state to state. There will be increased competition and lower costs.

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