Congressional Democrats launch attack on insurers’ anti-trust exemption

By Daniel Tencer
Wednesday, October 21st, 2009 -- 2:28 pm
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healthcareprotester Congressional Democrats launch attack on insurers anti trust exemptionDemocrats in Congress have launched a two-pronged attack on health insurance companies' 64-year-old exemption from anti-trust laws, with senior Democratic senators announcing their opposition to the exemption even as the House Judiciary Committee voted to end it as part of the health care reform effort.

In what the Associated Press described as "an increasingly bare-knuckled struggle over landmark health care legislation," a group of Senate Democrats announced Wednesday their intention to strip health insurers of their exemption -- in a 1945 law -- to laws that prevent corporations from creating monopolies or near-monopolies.

Sen. Patrick Leahy, Democrat of Vermont, said ending the anti-trust exemption would bring a halt to "price-fixing, bid-rigging and market allocation" in the health insurance industry, the Associated Press reported. The group led by Leahy intends to make the measure ending the exemption a part of the health care reform package being debated in the Senate.

"There is no reason why insurance companies should have exemption from antitrust laws," Sen. Harry Reid (D-NV) said Wednesday. "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."

The 1945 McCarran-Ferguson Act exempts certain types of businesses, including health care, railroads and Major League Baseball, from anti-trust laws passed in the late 19th and early 20th centuries that were designed to prevent the creation of monopolies. On Wednesday, the House Judiciary Committee voted to remove health care from that list of exempted businesses.

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"Joined by three of my Republican colleagues, the House Judiciary Committee agreed to bring antitrust enforcement to the two most abusive practices of the health insurance industry -- price fixing and market allocation," MarketWatch quoted Judiciary Commitee Chairman John Conyers (D-MI) as saying.

The measure will be voted on by the full House in several weeks' time.

Ironically, it may have been the health insurance industry's own actions that gave new momentum to long-running efforts by some Democrats to end the exemption. Last week, a study commissioned by America's Health Insurance Plans, a lobby group currently running ads against health reform, warned that insurance rates for Americans would go up by 40 percent over four years if the health care reform package being debated in Congress were to be enacted.

That brought strong criticism from supporters of health care reform, who argued that the health insurance industry had effectively proven they could not be trusted to keep costs down, and was using its dominant position in the market to scuttle attempts to reform the health care system.

"They unwittingly did this, but they made the single best argument I've seen in a while for why you need a vigorous competitor for the health insurance industry, namely a public plan," Rep. Anthony Weiner (D-NY) said.

In his weekly radio address on Saturday, President Barack Obama slammed the report as "bogus."

Many critics of the US's current health care model point to the anti-trust exemption as one of the primary reasons consumers don't have real choice among health care providers. BlueCross BlueShield, for example, controls 83 percent of Alabama's health insurance market, and WellPoint has no less than 78 percent of the market in Maine.

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Story comments are below...

  • Name
    Now is the time. Huge market for more efficient, competitive affordable care.
  • Name
    Now wouldn't be soon enough for me. First the health care industry said "Yay" to everyone being mandated to have insurance (like auto insurance is done), then in the same breath said that costs would rise. How is it that costs would rise if more people are mandated to participate in the system? Shouldn't costs fall if those who are subsidizing those without finally get a break because everyone is paying into the system? Yes indeed the health care industry is incapable of rational, fair and providing what they claim to provide. They want their cake and eat it too. They are a sham and desperately need solid competition. There is a huge market for people looking for more viable, solid and reliable and more affordable sources of insurance....and it can be done through increase competition--which is how our economy works....right?
  • pjamala
    Good idea.
  • smdmfrmr
    OK, so I lay down and take a nap and when I wake up the Democrats have suddenly grown testicles. Can this really be happening? Harry Reid too? I can't believe it.
  • Spiffarino
    All it takes is a jolt of reality. In this case, the jolt came from progressives who are running an ad targeting Harry for being sin cojones in pushing the public option.
  • Emi55Guy
    Voting update from Culbertson.house.gov

    Thank you for voting!
    For 71% (259 votes)
    Against 28% (104 votes)
    Indifferent 1% (4 votes)
    Total Votes: 367

    YEAH, BABY!
  • outrageddem
    health care is part of the public "COMMONS' - with out good health care our society could go down the tubes - think the plague. Public commons include things like roads, bridges, electricity, natural gas, water and sewage. We have Public Utility Commissions that regulate how much profit is earned on the public "commons" - why then can we not implement regulation on the health care industry. Up until this point it has been the elephant in the room no one talked about. Now is the time!!!
  • sford713
    My sh** for brains Congress Critter, John Culberson, is running a poll on the homepage of his website. Vote for or against H.R. 3200. Only about 134 votes so far with the knuckle draggers in the lead by about 70% to 24%. http://culberson.house.gov You know what to do!!!
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