Harry Reid Plays Chin Music With Insurance Companies; Threatens Repeal Of Anti-Trust Exemption

Well, looky here. Harry Reid is sending a not-so-veiled message to the insurance industry: You want to play dirty? We can play dirty, too. Here's hopi

Well, looky here. Harry Reid is sending a not-so-veiled message to the insurance industry: You want to play dirty? We can play dirty, too. Here's hoping this legislation has a chance of getting passed:

In a rare appearance as a witness at a Senate hearing, the majority leader, Harry Reid of Nevada, told the Judiciary Committee on Wednesday that it should repeal a 1945 law that granted the insurance industry limited exemption to national antitrust laws by allowing states to regulate insurers.

The law, the McCarran-Ferguson Act, is often cited by Mr. Reid and other critics of the health insurance industry as a reason why coverage can be so expensive for many people. They say the law allows insurers to monopolize markets and fix prices in ways that are usually illegal.

“Since 1945, the insurance industry has enjoyed exemption from federal antitrust laws because of the McCarran-Ferguson Act,” Mr. Reid said. “Pat McCarran, who was the senior senator from Nevada at the time, lent his name to this piece of legislation. Although we’re both Nevadans, I’m not sure what Pat McCarran had in mind when he pushed this bill. And if Pat were around today, he couldn’t be happy with the state of the insurance industry.”

“Providing an exemption for insurance companies to antitrust laws has been anticompetitive and damaging to the American economy,” Mr. Reid continued. “Health insurance premiums have continued to rise at a rapid rate, forcing businesses to cut back on health insurance coverage and forcing many families to choose between health insurance and basic necessities.”

He added: “Insurance companies have become so large they dominate entire regions of the country. They have become so powerful they block start-up businesses from entering the market, and they put smaller companies out of business. They have become so dominant that they dictate business practices. They are so influential that they exert tremendous influence over public policy.”

The chairman of the Judiciary Committee, Senator Patrick J. Leahy, Democrat of Vermont, has introduced a bill — the Health Insurance Industry Antitrust Enforcement Act — that would repeal the insurance industry’s limited exemption.

And some senior Democrats, including Senator Charles E. Schumer of New York, have begun calling for Mr. Leahy’s bill to be included in the major health care legislation that is now advancing in Congress.

That effort could gain momentum as Democrats continue to hit back at a main industry trade group, America’s Health Insurance Plans, which issued a report on Sunday night asserting that the Democrats’ legislation would lead to a steep rise in health insurance premiums.

The White House, Congressional Democrats and other supporters of the legislation have worked to discredit the industry report, which was prepared by PricewaterhouseCoopers. The firm has acknowledged that it looked at only four provisions in the huge health care bill and that it did not take into account federal subsidies that would be made available to help moderate-income Americans buy insurance.

Mr. Schumer, a member of the Senate Finance Committee, issued a news release Wednesday accusing the health insurance industry of trying to “sucker-punch” the Democrats’ health care legislation by issuing the report the day before the Finance Committee voted on its version of the bill.

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