House Votes To Strip Insurers' Antitrust Exemption

Feb 24, 2010 - Kaiser Health News

The House voted Wednesday – by a broad bipartisan majority of 406-19 – to repeal health insurers' exemption from federal antitrust laws, the Associated Press/Atlanta Journal Constitution reports. Despite siding with Democrats, "Republican lawmakers complained c that the legislation passed Wednesday was largely symbolic and would have little real impact since states already regulate health insurers." Democrats have argued that repealing the exemption would make the industry more competitive (Werner 2/24).

USA Today: The bill "would overturn provisions of a 1945 law that gave the insurance industry broad exemptions from federal regulation of monopolies. House Democrats included the proposal in their now-stalled $1 trillion health care bill. The Senate did not." Although one of the bill's supporters, Rep. Betsy Markey, D-Colo., said the measure would help prevent insurance companies from conspiring "to fix prices, divide territories and never be punished for it," the nonpartisan Congressional Budget Office said it was not clear that had been happening. CBO wrote in a report last year that "the provision 'would apply to a small number of offenders.' In another report, the CBO predicts that 'implementing those provisions would have no significant effects on either the federal budget or the premiums that private insurers charged for health insurance.' In a statement, Karen Ignagni, president of the insurance industry group America's Health Insurance Plans, said the bill attempts to 'solve a problem that doesn't exist'" (Fritze, 2/24).

Roll Call: The vote "split the House Republican leadership: Minority Leader John Boehner (Ohio) and a small band of conservatives voted to preserve the exemption, while Minority Whip Eric Cantor (Va.) and the bulk of the Republican Conference backed the measure. Democrats unanimously supported the measure, with a parade of endangered freshmen coming to the floor to extol the measure as a common-sense way to increase competition and fight higher health insurance rates. c And some Republicans who opposed the measure, including Rep. Scott Garrett (N.J.), warned it could raise premiums instead of lowering them because it would expose insurance companies to the costs of antitrust lawsuits" (Dennis, 2/24). 
 
National Underwriter, an insurance trade journal, adds, "The bill would repeal the antitrust exemption afforded the business of health insurance – but not the business of medical malpractice insurance – by the McCarran-Ferguson Act." An insurance industry trade group, America's Health Insurance Plans, said the repeal " is likely to do more harm than good" (Postal, 2/24).

The (Fort Collins) Coloradoan reports, "Rather than spending extensive time criticizing the bill ... Republicans spent much of their time arguing that lawsuit reform would do more to lower costs than repealing the antitrust exemption" (Moore, 4/24). 

Kaiser Health News has a story explaining the exemption.

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