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House Approves Removing Insurers' Antitrust Exemption

John Commins and Joe Cantlupe, February 24, 2010

The U.S. House of Representatives today stripped health insurance companies of antitrust exemptions by a 406-19 vote.

The bill received the support of all Democrats who voted and from 153 Republicans. Nineteen Republicans voted against the bill.

The Health Insurance Industry Fair Competition Act (HR 4626), sponsored by Democratic Representatives Tom Perriello of Virginia and Betsy Markey of Colorado, removes the health insurance industry's antitrust protections under the McCarran-Ferguson Act of 1945.

Markey and Perriello said in a joint media release that passage of the bill means that health insurers would no longer be protected from liability for price fixing, dividing up market territories, or bid rigging.

In the last 14 years, the cosponsors said, there have been 400 mergers among healthcare insurers so that 95% of health insurance markets are "highly concentrated," which means consumers have little or no choice between insurers. This non-competitive market has led to health insurance premiums having more than doubled in the past decade.

Related legislation in the Senate, S 1681, sponsored by Judiciary Committee Chairman Patrick Leahy, D-VT, remains in his committee, where it is expected to face more-concerted resistance from Republicans.

Health insurers criticized the legislation passed by the House Wednesday as misdirected and unnecessary.

"In attempting to solve a problem that doesn't exist, this legislation is the triumph of soundbites over substance," said Karen Ignani, president and CEO of America's Health Insurance Plans in a prepared statement. She added that the National Association of Insurance Commissioners determined anti-competitive practices already are not permitted under the McCarran-Ferguson Act and are not tolerated under state law.

Ignani said the House action had nothing to do with healthcare reform. "Real reform means containing costs to ensure that healthcare is affordable for working families and small businesses," she said. "It's time to clear the political hurdles that stand in the way of real cost containment."

Ignani added that the Congressional Budget Office has said that "passage of this legislation will do nothing to reduce healthcare costs."

"We don't think it's necessary, it's not going to do anything," Brett Lieberman, spokesman for the Blue Cross Blue Shield Association, referring to the House vote. "Health insurers are very regulated, with many state and federal regulations. This isn't going to do anything about the underlying factors that are driving costs—medical expenses and people losing jobs."

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