Legislation to modify the federal antitrust exemption for healthand medical malpractice insurers "will have no significant effect"on premiums charged for private health insurance, the CongressionalBudget Office has determined.

"Based on information from the Justice Department, the FederalTrade Commission, the National Association of InsuranceCommissioners, consumer groups and private attorneys, CBO estimatesthat both of those effects would be very small, and thus thatenacting the legislation would have no significant effect on thepremiums that private insurers would charge for health insurance,"the agency reported.

The CBO also said that to the extent insurers would otherwiseengage in prohibited practices and be prevented from doing so byenactment of this bill, premiums might be lower.

However, the CBO report added, "that effect is likely to besmall because state laws already bar the activities that would beprohibited under federal law if this bill was enacted."

Responding to the CBO analysis, officials of the PhysicianInsurers Association of America, which represents medicalmalpractice insurers owned by physicians' groups, said the reportrefutes claims by "several consumer groups" that repealing theprovision would reduce health insurance costs by 20 percent.

Lawrence E. Smarr, president of the PIAA, added that the CBOreport has "revealed that this legislation is in essence apolitically motivated attempt to appease personal injury lawyersvia a spurious bill."

The CBO's projections were based on an analysis of H.R. 3596,passed by the House Judiciary Committee and incorporated into theoverall House health care reform package–H.R. 3962, "the AffordableHealth Care for America Act."

The House bill includes an amendment that provides "safeharbors" for joint insurance industry activities now protected fromantitrust regulation, such as compilation of historic loss dataacross the industry.

When the notion of stripping certain types of insurers of theirantitrust exemptions under the McCarran-Ferguson Act was raisedlast month, after health insurers criticized the latest healthreform bills, a group of nine property and casualty insurance tradegroups charged that backers had a hidden agenda of opening up somesegments of the insurance industry to more lawsuits.

The p&c groups characterized the move as "an attempt toradically rewrite the antitrust laws for a certain segment of theinsurance business," and argued that those who support them have "amuch broader, but undisclosed agenda."

A joint letter was sent to the leadership of the House JudiciaryCommittee that voiced "strong opposition" to the "Health InsuranceIndustry Antitrust Enforcement Act of 2009″–H.R. 3596 in the Houseand S. 1681 in the Senate.

Further, the letter said there is no demonstrated need "toexpand the scope of the health care reform debate in thisfashion."

The letter was signed by the chief executives of the AmericanInsurance Association, Council of Insurance Agents and Brokers,Financial Services Roundtable, Independent Insurance Agents andBrokers of America, National Association of Mutual InsuranceCompanies, National Association of Professional Insurance Agents,Physician Insurers Association of America, Property CasualtyInsurers Association of America, and the Reinsurance Association ofAmerica.

The letter contended the bills would "repeal long-standingprovisions" of the McCarran-Ferguson Act with respect to health andmedical malpractice insurers.

"We, therefore, urge you to oppose these current bills, as theywould bring no consumer benefit while causing enormous marketplacedisruption that might have the perverse effect of discouraging newmarketplace entrants," the letter said.

"It would be ironic indeed if the primary purpose of the federalantitrust laws–promoting competition–was undercut through enactmentof either bill," the letter concluded.