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What Would Taking Away Health Insurers' Antitrust Protections Mean?

John Commins and Joe Cantlupe, February 25, 2010

Depending upon who is talking, legislation to strip health insurance companies of antitrust exemptions will spur competition and lower costs; have no impact; or actually make things worse.
The US House passed Wednesday by 406-19 vote The Health Insurance Industry Fair Competition Act (HR 4626) , which removes the health insurance industry's antitrust protections under the McCarran-Ferguson Act of 1945.

Rep. Tom Perriello, D-VA, a cosponsor of the House bill, said its passage shows that "Washington finally took a stand for patients, for the free market, and for common-sense, bipartisan principles of fairness. Today, we sent a simple message: health insurance companies must compete for business like everyone else."

"Working and middle-class families are sick and tired of getting nickel and dimed by these companies, while they rack up billions in profit and enjoy their monopoly protection," Perriello said in a post-vote media release.

President Obama applauded the bipartisan vote.

"This bill will help ensure that insurers abide by common-sense rules that prevent bid-rigging, price-fixing, and other practices that drive up healthcare costs for the American people," Obama said. "Repealing the antitrust exemption for health insurers is an important step toward achieving reform that gives families and business owners greater control over their healthcare."

Supporters of the bill note that in the last 14 years, there have been 400 mergers among healthcare insurers so that 95% of health insurance markets are "highly concentrated." During the past decade while this concentrated market has enjoyed its exemption from antitrust regulation, health insurance premiums have doubled, Democrats said.

The House's vote came on the same day that the American Medical Association issued a report that found competition in the health insurance industry is disappearing.

Other supporters of the bill include the American Hospital Association, the American Dental Association, the American Academy of Pediatrics, the National Association of Attorneys General, and the National Farmers Union.

Not surprisingly, America's Health Insurance Plans takes a different view. "In attempting to solve a problem that doesn't exist, this legislation is the triumph of sound bites over substance," said Karen Ignani, president and CEO of America's Health Insurance Plans.

Ignani said the House action has 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."

Blue Cross Blue Shield Association spokesman Brett Lieberman said the legislation is "not going to do anything about the underlying factors that are driving costs—medical expenses and people losing jobs."

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