US Senate And US Congress Move To Strip Health Insurance Companies Of Exemption To Anti-Monopoly Laws

New bid to crack down on US health insurers
By Anna Fifield in Washington
Published: October 21 2009 19:07 Last updated: October 22 2009 00:25
A US House of Representatives committee voted on Wednesday to strip health insurers of their exemption to federal antitrust rules, as Democratic leaders in the Senate moved to overturn the same exemption as part of a broader healthcare reform package.
The twin moves came as Democrats redoubled their efforts to crack down on the health insurance industry, which has opposed the establishment of a government-backed insurance plan that would compete with private providers.
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The House judiciary committee voted 20-9 to repeal the antitrust exclusion established in the 1945 McCarran-Ferguson Act, which exempted health and medical malpractice insurance companies from federal antitrust violations including price-fixing, bid-rigging and market allocations, leaving them subject only to state regulation.
Lawmakers on the committee said they wanted the exemption included in the final healthcare reform bill now being assembled on Capitol Hill.
Harry Reid, the Senate majority leader who is merging two healthcare bills from the upper chamber, which will then be combined with the House proposal, on Wednesday moved to overturn the exemption in the final legislation.
“Providing antitrust exemptions for insurance companies has been anticompetitive and damaging to the American family and the American economy,” Mr Reid said. “It’s time to level the playing field for American healthcare consumers. It’s time to make the insurance industry play by the same rules that other industries live by,” he added.
Simmering tensions be-tween Democrats and health insurance companies burst into the open last week after a lobby group released an explosive report claiming that premiums would rise under the Obama administration’s plans for broad reform.
“The [health insurance] industry is not saying that the rules have to be different for us, they are saying they don’t want any rules,” Patrick Leahy, chairman of the Senate judiciary committee, said on Wednesday.
“We have to ask them why should every other industry, whether it’s construction company or an automobile company, why should they have to follow the rules but you shouldn’t have to?” he said.
Jim Guest, president of the Consumers’ Union, threw his weight behind the senators’ amendment. He said: “When it comes to competition, health insurers should not be given a free pass. It’s bad for consumers, bad for patients and bad for taxpayers.”