House Votes To Repeal Anti-Trust Exemption For Health Insurance Companies

Co-author Rep. Tom Perreillo (D-VA) to Insurance Companies: "Be afraid, be very afraid..." A positive step in the right direction: By a vote of

Co-author Rep. Tom Perreillo (D-VA) to Insurance Companies: "Be afraid, be very afraid..."

A positive step in the right direction:

By a vote of 406-19, the House passed the Health Insurance Industry Fair Competition Act (HR 4626), introduced by Reps. Tom Perriello (D-VA) and Betsy Markey (D-CO). This bill is designed to restore competition and transparency to the health insurance market – by repealing the blanket antitrust exemption afforded to health insurance companies by the McCarran-Ferguson Act of 1945. Under this legislation, health insurers will no longer be shielded from legal accountability for price fixing, dividing up territories among themselves, sabotaging their competitors in order to gain monopoly power, and other such anti-competitive practices.

Over the last several years, the health insurance industry has become increasingly concentrated–giving consumers fewer and fewer meaningful choices in shopping for health insurance. According to a recent study by the AMA, there have been more than 400 mergers among health insurers in the past 14 years. [..]

This bill is also necessary because, over the years, health insurers have been able to use this antitrust exemption to block court actions regarding anti-competitive behavior. In Ocean State Physicians Health Plan, Inc. v Blue Cross & Blue Shield of Rhode Island, the First Circuit Court – citing the McCarran-Ferguson antitrust exemption – overturned a jury verdict against the dominant health insurer for using its monopoly power to put financial pressure on area employers to refuse to do business with a competing HMO.

There is also evidence that removing this antitrust exemption will result in lower prices and other benefits for consumers. Time and time again, increased competition results in lower prices, increased choice, and greater innovation. A healthy and competitive health insurance market will drive prices down in the health insurance industry, just as we have seen it do in so many other industries where competition is allowed to take hold. Since California passed a law in 1988 that eliminated the state antitrust exemption for the auto insurance industry, for instance, auto premiums for consumers in California have risen by 9.8% while the rest of the country has seen auto premiums rise by over 48%.

An incremental victory, to be sure, but a victory nonetheless. I like what Nancy Pelosi had to say:

The House of Representatives, Mr. Chairman, is called "The People’s House." Today, we live up to that name. By passing legislation that increases leverage for the people by changing the playing field, a playing field that has been dominated by the insurance industry for over 65 years and now it’s the people’s turn. The insurance companies will now be playing on the people’s field.

Rep. Anthony Weiner had the money quote, however, as captured by Think Progress:

You guys have chutzpah. The Republican Party is the wholly owned subsidiary of the insurance industry. They say this isn’t going to do enough, but when we propose an alternative to provide competition, they’re against it. They say we want to strengthen state insurance commissioners and they’ll do the job. But when we did that in our national health care bill, they said we’re against it. They said we want to have competition but when we proposed requiring competition they’re against it. They’re a wholly owned subsidiary of the insurance industry. That’s the fact!

Love it! Of course, there are a couple of senators in the Democratic caucus that we can say the same thing about. I'm looking at you, Ben Nelson and Joe Lieberman.

About Nicole Belle

Nicole Belle's picture
Mom, Wife, Media Critic/Political Analyst, Blogger, Austen Fanatic, Unapologetic Liberal NicoleBelle@crooksandliars.com

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