Democrats Taking On Healthcare Insurers’ Antitrust Immunity

If Democrats get their way, healthcare insurers will lose their immunity from antitrust laws.  Democrats in the House and Senate are trying to strip the insurance industry of its decades-old exemption from federal antitrust laws, in the fight to overhaul the way healthcare is delivered in the United States.  If the legislation is passed, it will end the “price-fixing, bid-rigging and market allocation in the health and medical malpractice” insurance areas, according to Senator Patrick Leahy (D-VT), chairman of the Senate Judiciary Committee.  Leahy’s statement coincided with the House Judiciary Committee’s 20 – 9 vote to end the industry exemption.

Health insurers are fighting back, with Karen Ignagni, president and CEO of America’s Health Insurance Plans (AHIP) claiming that “We believe that health insurers have not been engaging in anti-competitive conduct and that McCarran – Ferguson does not provide a shield for such conduct” in a letter to Representative John Conyers (D-MI), who chairs the House Judiciary Committee.  The McCarran – Ferguson Act of 1945 gives states the ability to regulate the insurance industry for antitrust matters.  As a result, insurance companies currently are exempt from federal jurisdiction.

The moves to revoke healthcare insurers’ long-term immunity from antitrust laws reflect the Democrats’ anger in response to the industry’s attempts to shape reform legislation.  The action came shortly after AHIP issued a report asserting that a measure in the Senate Finance Committee would result in significantly higher premiums for people who current have healthcare insurance.  Democrats and President Obama attacked the study as flawed and motivated by politics.  According to the president, insurers are earning “profits and bonuses while enjoying a privileged exemption from our antitrust laws, a matter that Congress is rightfully reviewing.”

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