Conyers, Leahy Introduce Bill To End Health Insurers' Anti-Trust Exemption
By dday Friday Sep 18, 2009 9:00amJohn Conyers and some allies on the House Judiciary Committee have come up with a fabulous way to get the insurance industry in line - by threatening to remove their anti-trust exemption.
Many people don't know that the insurance industry, under the McCarran-Ferguson Act of 1945, has a broad anti-trust exemption that facilitates regional monopolies. The Act allows states to regulate the insurance business instead of the federal government, but also allows that, as long as the state regulates the industry, federal anti-trust laws would not apply.
As a result of this exemption, states have seen markets for health insurance where one or two companies predominate. In the state of Maine, Wellpoint controls 71% of the market. In North Dakota, Blue Cross controls 90%. Using the Herfindahl/Hirschman Index, a metric for market concentration, a 2007 study by the AMA found almost every health insurance market in the United States is highly concentrated.
This edition of the study analyzed 313 MSAs. This compares with 292 metropolitan areas in the 2005 study, 84 in the 2003 study, 70 in the 2002 study, and 40 in the 2001 study.
In terms of market concentration (HHI), the study found the following:
In the combined HMO/PPO product market, 96 percent (299) of the MSAs are highly concentrated (HHI>1,800), applying the 1997 Merger Guidelines.
In the HMO product market, 99 percent (309) of the MSAs are highly concentrated (HHI>1,800), applying the 1997 Merger Guidelines.
In the PPO product market, 100 percent (313) of the MSAs are highly concentrated (HHI>1,800), applying the 1997 Merger Guidelines.
Here's the AMA study. Paul Rosenberg has a lot more on this.
The point is that the concentration of the health insurance market among regional monopolies leads to higher costs for consumers, almost by definition. What the legislation by Conyers (D-MI), Hank Johnson (D-GA) and Diana DeGette (D-CO) would do is end that anti-trust exemption for health insurers, allowing for enforcement in all of these highly concentrated markets. The Senate has companion legislation:
“This legislation would specifically prohibit price fixing, bid rigging, and market allocation in the health insurance industry,” said Conyers. “These pernicious practices are detrimental to competition and result in higher prices for consumers. Conduct that is unlawful throughout the country should not be allowed for insurance companies under antitrust exemption. The House Judiciary Committee held extensive hearings on the effects of the insurance industry’s antitrust exemption throughout the 1980s and early 1990s. It became clear then that policyholders and the economy in general would benefit from eliminating this exemption.
“The legislation we introduced today is intended to root out unlawful activity in an industry grown complacent by decades of protection from antitrust oversight. In doing so, we aim to make health insurance more affordable to more Americans. I want to thank my friend Senator Leahy for his leadership on the bill and for working with the House on this joint introduction.”
Many of the actions taken by the insurance industry over the years simply violate federal law. Repealing their anti-trust exemption would force the industry to end their criminal ways or face punishment. As a companion to insurance regulations designed to lower prices for consumers, but perhaps without the kind of enforcement necessary to maintain it, I couldn't think of anything better. And if nothing else, this legislation is a powerful whip to keep the industry in line as they try to extract more perks from the health care bill. Combine this with the multiple investigations into industry practices from Dennis Kucinich, Henry Waxman and others, and you have real pressure on the industry for the first time in a while.
Good for John Conyers.
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now THAT's what I'm talkin about!
Indeed. That is change I can believe in.
Is this more cover-up, happy-talk, or does it actually have any legs to stand on. When, precisely will this come to the floor??? Since us peons have gotten nothing but bait/switch, happy-talk vis a vis 'What a wonderful economy we have' and happy-talk abt. the Public Option, I believe nothing these traitorous congress-critters mouth. NOTHTING!!!
I expect this to be just like Rep Weiner's health care bill. Big noise when announced and then strait down the memory hole so it can be removed from consideration or voted down on a 'high distraction' news day.
Carrot at the end of a stick. We keep pullin their cart.
but what about this?
http://rawstory.com/08/news/2009/09/18/quietl...
It is very encouraging that a Supreme says something so sensible on this matter.
But never forget the RAT PACK h/t bratboy here
R-oberts
A-lito
T-homas
S-calia
optimistic.
... or just another strong worded letter. With Mr. Conyers at the helm you never know...
Unfortunately, I wonder who will vote for it? Those on the payroll of the insurance companies? Like someone said yesterday, Rut roh!
Izzat anything like a butt roid?
http://www.youtube.com/watch?v=0_C2HJvtRDY
Ruuuuu?
Tyler but this gives him/ the dems a chance to be pretty sneaky (political nirvana) without having to show any backbone. Call it a "sunset provision on a decades old anti-trust law." I mean, how many droolers could even understand it to get the rocket launchers out for?
And after them.
And after them.
Let them die by 'the death of a thoushand cuts.' I'm sure they wouldn't cover that for one of us. Why should we give a shit if some monopolistic corporations die of nitpicking?
Keep on pickin'!
leverage, make it law!
Leahy's bill is more narrow, limited only to health and medical malpractice insurance. Insurance lobbyists raised a stink the last time he called for a general repeal of McCarran-Ferguson, back in 2006, using the argument that small insurers needed the exemptions to share loss data and adopt universal policy language (both being bullshit).
But as there's no such thing as a small health or medical malpractice insurer anymore, at least in terms of market share, there should be less hostility to a narrower version.
prosecution for organized crime. They are guilty, guilty, guilty, without the antitrust exemption. This is a brilliant strategy except for one thing: if real people do not demand this, if won't become law. Start screaming for it immediately. Do not let this be branded by the GOP.
The previous bill ultimately didn't pass because Lott got an amendment through that would still exempt loss data sharing, which ultimately made the bill pointless. Lott was really more interested in kicking State Farm in the teeth after they refused his flood claims after Katrina, and sharing loss data doesn't really apply to residential and commercial property insurance.
Leahy is taking a different approach now. Rather than get every insurance industry against reform, and you can make the argument that some types of insurance fair better with some "harmless" exemptions that allow for joint underwriting, health and medical malpractice insurers need none of these.
Plus McCarran-Ferguson is the reason why insurance companies don't compete across state lines, which has been a clarion call of the right for the past few months as an answer to the question of more competition. Of course many on the right, especially the glibertarian crowd, want to allow interstate competition and preserve the Sherman exemptions (and not just for insurance, but for every industry). But Republican moderates think that's insane, and rightly so.
Who got the first 'bail-out', the insurance company AIG with the inside leverage of Paulson, Geither, and that other smiling whited seplacure whose silly name escapes me. PUKIES gotta protect their buyers and arent' going to go against them. This is hollow happy-talk.
And insurance companies love the McCarran-Ferguson Act. Keeping it in place is of highest priority in the industry. This will be a real fight.
20 years ago I worked at an insurance company (since gone bankrupt because of bad business practices) and was required to take some industry sponsored courses. Nearly every chapter mentioned some benefit the insurance companies had because of the M-F Act (never realized how appropriate that abbreviation is.)
This is the other dirty little secret: one of the reasons state insurance regulation is not effective is because the insurance companies make sure that their interests come first; in fact the original purpose of state insurance regulation was to protect the companies, not the consumer. They HATE that the consumer has been given a voice over the past 30 years. It never occurs to them that their own excesses have fostered that change.
Most people don't realize that McCarran-Ferguson arose as a compromise between state regulators and the insurance industry.
Up until 1944, insurance wasn't considered commerce, so it couldn't be regulated by Congress under the Commerce Clause. It was changed because insurers started taking state regulators to Federal court over state taxes and fees, and the SCOTUS ruled that Congress had the right to regulate it. So in 1945 the National Association of Insurance Commissioners drafted a bill that preserved the Congressional right, but stated that Federal anti-trust regulations would not apply so long as there's a state agency in place to regulate.
Insurance companies became the only private business in America that was exempt from Sherman, and the NAIC preserved their fiefdoms. It was sponsored in the Senate by Patrick McCarran and Homer Ferguson, but they didn't write it.
... it sort of makes the whole "death panel/illegal and unfair interference by the government" accusations from the defenders of the insurance industry all the more doubleplusprojecting.
baseball, fer sher, and probly all the big three
What!? Free-market capitalism!?!?!
Never was, never will be any such thing.
Viva regulation for the commonweal and not the RATS.
"portable," and does not cover a person who is sick or injured while out of their home state. Couple that with the "zones" that the major HI companies have set up for themselves to prevent having to compete with each other, and what results is a conspiracy. Yet another crime. The question becomes, can a corporation be prosecuted for crimes. I think the answer is, probably. Anyway, it at least shows that the corporate control is not quite complete, I think. Very close, but not total.
... in underproduction of a good or service at inflated price. When demand is "inelastic" (meaning that those demanding the good or service will still demand it even when price is severely adjusted) this price can be radically inflated.
Three areas of very inelastic demand are, surprise surprise, health care, energy, and munitions. And we seem to have monopolies/oligopolies in all three. Hmmmm....
Also, insurance companies' anti-trust exemption goes all the way back to the Sherman Anti-trust Act. It seems that even Teddy Roosevelt was not above taking bribes.
I've heard of these monopolies of which you speak. I remember hearing about them years ago but I thought they had become extinct.
There may be good reasons to end antitrust exemption, but market concentration isn't one of them. There's very little correlation between the exemption and concentration.
The exemption allows insurers to pool historic loss information so that they are better able to project future losses and charge an actuarially based price for their products. It also allows for joint development of policy forms. The act does not exempt insurers from state antitrust laws, which explicitly prohibit insurers and any other businesses from conspiring to fix prices or otherwise restrict competition.
The move to end the exemption is purely a punitive, political one. And, a clever move at that.
14 min and 14 seconds of participation and you're blowing shit out your bung-hole like a seasoned, practiced trool...
State anti-trust laws are notoriously shitty, weak, and easily evaded.
Go deny insurance to some dying mother of three,. you fucking cretin...
I'd kill you in a civil debate on this issue. Check the objective literature and you'll find out I'm right. I have a lot of experience on the issue and have helped draft regulations in 19 states that tighten restrictions on insurers. Oh, and by the way, I happen to be a well-known advocate of single payer.
So, woody, lighten up.
Put up or shut up.
of course.
No, if its going to turn out that these companies and their manipulation of the market was done totally for our own good. Altruistic bunch these degerates are and all...
I read your comment above, and to be honest with you.
I don't know wtf woody is talking about.
And savannah, wtf?
Anyway, Redsky. Thanks for your input. I enjoyed reading your comment. I look forward to see more of them.
Thanks again.
.
As a some-time lobbyist, I know the CorpoRats prefer to do their major corruption damage at the state level, where it 1) costs 'em less to bribe officials, 2) the level of competence among elected and appointed officials is considerably diminished, 3) there is typically far less supervision, and 4) the locals are easier to control...
Sharing of actuarial information is insufficient, in and of itself, to constitute an anti-trust violation. Moreover, they didn't just receive an exemption for sharing actuarial information, they received an exemption from all federal anti-trust laws.
Cute little distraction on the state anti-trust laws, especially the implication that they all provide the same protections as federal laws (or even as compared with each other). Got a source on that?
I'd also love to see a link justifying your assertion that "There's very little correlation between the exemption and concentration." Especially when you make that assertion following a post which clearly demonstrates the heavy market concentration of an exempted industry.
And yeah, I took an Anti-Trust class too (whoopey). The insurance company propaganda you just spouted didn't even survive the scrutiny of a bunch of third years.
Tool.
you are the only one who is bringing "market concentration" to this fray. I think we're more concerned about the whole price fixing, cartel-like behavior, uncompetitive and inhumane practices that these HMOs bring to the table with the protection of their anti-trust exception.
I love your spin though. Out of curiosity, did you actually believe what you wrote or did you seriously think that people would fall for it?
here. "Nuff said.
.
.
...this may be related to backroom deal/sting operations, complete with witnesses (willing to testify) and videotape evidence. The big insurance mafia just can't resist a little crimin"...make that a lot of crimin'...it's in the DNA.
The question to ask at this point, to paraphrase the Shrub, "Is our big pharmas bribin' and blackmailin'?"
... into a "no HMO left behind" type of Bush approach to policy.
O'Reilly Agrees:
different position than he usually takes. He has lost some of the adoration of Fox viewers, as Beck as become the most popular of the group. Ha, ha!
Insurance was bought and paid for by people that wanted more money from the populous. It is criminal conspiracy, and it always has been. There is nothing legitimate about it, as it is based solely on fraud. Look at it from someone that has never seen or heard of it before in another country. They would call it bribery.
Or both.
The heart of the Insurance Industry, all of them, are these abilities that have clearly been developed to skirt Anti-Trust laws.
Unfounded mandates, were supposed to be founded by the Industry, they've found a way out of that payment and the States, now stay in deficits because of the practice. The Insurance Industry has found that it is useful to cancel, "Rescission" and use “Pre-existing Conditions” and those “Industry Standard, built, into some forms,” as Law and there not law.
The use of “Rationing Care & Medications,” and the famous, “Denial of care, until the outcome is grim” these practices have been made uniformed and standardized and are told to customers, that they are rules and standards, through out the Industry, they are discouraging, but here's the sell, there like law and there not, they use these and more to collude.
Excellent article about "corporate parasites."
Cuz Kennedy's a Meese-clone corpoRat, too...
Thom Hartman and Bernie Sanders have brought up this subject numerous times on Hartman's show.
Leahy has more caucus clout than Sanders, so I'll bet Sanders put the bug in his ear.
In any case, this will be one fascinating debate if it makes it our of committee.
If Repubs and Dems are so committed to de-funding ACORN because a handful of its employees defrauded tax payers by their actions, then I wonder why we haven't heard much about the insurance companies?
Sorry, I realize this is a rhetorical post.
n/t
from anti-trust laws.
Damn straight I didn't know that. What a pisser.
No wonder I quit business school and became a radical liberal.
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