Repeal of Health Insurance Antitrust Exemption Passes House
This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.
Health insurers would lose their exemption from the federal antitrust laws under the proposed "Health Insurance Industry Fair Competition Act," which was overwhelmingly approved by the House of Representatives on February 24. The measure (H.R. 4626) passed 406 to 19.
Specifically, the bill would amend the McCarran-Ferguson Act to add a provision stating that the Act does not "modify, impair, or supersede the operation of any of the antitrust laws with respect to the business of health insurance."
Freestanding Measure
The measure was introduced by Representatives Tom Perriello (D-Virginia) and Betsy Markey (D-Colorado) on February 22. The freestanding measure followed a similar bill, which had been incorporated into the comprehensive health care bill passed by the House last year.
The now-stalled "Affordable Health Care for America Act" (H.R. 3962) contained a provision repealing the McCarran-Ferguson Act exemption for health insurance as well as medical malpractice insurance from certain antitrust violations, including price fixing, market allocation, or monopolization.
Upholding “Free Market Protections”
House Judiciary Committee Chairman John Conyers, Jr. (D-Michigan) said that the bill "will uphold free-market protections by making insurance companies legally accountable for collusion schemes to fix prices, divide up markets and customers to restrict choice, and use monopoly power to sabotage anyone who seeks to offer meaningful competitive choice to consumers."
House Judiciary Committee Ranking Member Lamar Smith (R-Texas) said the Health Insurance Industry Fair Competition Act "has all the substance of a soup made by boiling the shadow of a chicken." Smith contended that the McCarran-Ferguson Act's federal antitrust exemption promotes competition by allowing small and medium-sized insurers to aggregate information for underwriting purposes so they can compete effectively against larger companies.
Impact on Premiums
According to Smith, the Congressional Budget Office had concluded that the impact on health insurance premiums resulting from the repeal of the antitrust exemption would likely to be quite small. In any event, Smith ultimately offered his reluctant support for what he called the "ineffective bill."
Following passage by the House, the bill was received by the Senate on February 25 and then read for the first time and placed on the Senate Legislative Calendar on February 26. It was read the second time and placed on the Senate Legislative Calendar under General Orders on March 1.
Further information about the bill, including full text, is available here at the Library of Congress Thomas legislative website.
