NU Online News Service, March 22, 2:22 p.m.EST

The House took action again today on repealing theMcCarran-Ferguson antitrust exemption for health insurers bypassing the larger bill to which the repeal amendment wasattached.

The bill, H.R. 5 passed the House by a vote 223 to 181, mostlyalong party lines.

The McCarran-Ferguson repeal amendment passed by voice vote.

Late Tuesday, the House Rules Committee cleared the McCarran-Ferguson repeal amendment for floordebate. But the amendment was significantly narrowed duringthat process to explicitly exempt property and casualty and lifeproducts from the repeal, as well as products allied with them,including workers' compensation insurance.

Still, property and casualty and life-insurance companies, whichmobilized starting last week to try to either kill or modify thebill, noted their concerns in reacting to the vote.

Melissa Shelk, vice president for federal affairs at theAmerican Insurance Association, says, “Any attempts to broadlyrepeal McCarran-Ferguson are misguided and could have unintendedconsequences that, ironically, could stifle market competitionwhile promoting regulatory uncertainty and increasedlitigation.”

She adds, “While we would prefer to see McCarran left intact,the amendment's author recognized that property and casualtyinsurance products, along with other non-health-insurance lines,should be exempted from the amendment's scope.”

Shelk says, “In the decades since McCarran's adoption, insurershave been able, through state oversight of advisory organizations,to share loss-cost data to predict future losses and to developcommon policy forms, which has fostered competition in a mannerthat greatly benefits consumers.”

The amendment's sponsor, Rep. Paul Gosar, R-Ariz., highlightedin a House floor speech a provision of the amendment that would barclass-action lawsuits in federal court against health-insurancecompanies.

“The Federal Trade Commission should have the power toinvestigate bad actors in the health-insurance industry, but ithelps no one if these companies, or for that matter any Americanbusiness, gets mired in lawsuits that will cost millions,” Gosarsaid.

“Class-action lawsuits often result in big bucks in attorney'sfees for greedy trial lawyers while leaving only pennies in thehands of the plaintiffs who were allegedly wronged in the firstplace,” he said.

Robert Zirkelbach, a spokesman forAmerica's Health InsurancePlans, said after the vote that, “Health insurance is one of themost regulated industries inAmericaat both the federal and thestate levels. The McCarran-Ferguson Act is extremely limitedin scope and has nothing to do with competition within the healthinsurance industry.”

He adds, “The focus should be on addressing the underlying costof medical care, which is the real driver of rising premiums.”

The broader legislation, H.R. 5, Protecting Access to Healthcare(PATH) Act, imposes federal standards designed to further limitmedical-malpractice lawsuits. It would do so by capping amedical-malpractice victim's recovery.

In comments on the House floor, Rep. Linda Sanchez, D-Calif.,said H.R. 5 is a deplorable bill.

She said, “It is the most simplistic and useless method foraddressing very real problems with our medical community. It is aridiculous piece of legislation that is akin to trying to put out aforest fire with a squirt gun.”

The bill would also repeal a provision of the healthcare reformlaw that created an Independent Payment Advisory Board. The purposeof the board is to reduce the growth in Medicare spending.

But the legislation is unlikely to become law. WashingtonAnalysis, which advises hedge funds and other institutionaladvisors, said earlier this week that the bill “should sail throughthe House, but it won't go any further than that.”

Washington Analysis said, “At one point, there were almost 20Democratic co-sponsors, but Republican efforts to offset the bill'scosts via the malpractice-liability provisions eroded much of thatsupport.

“In any case, the opposition of Senate Democrats and PresidentObama ensures that it would not be signed into law regardless ofthe level of support in the House.”

Gosar's McCarran-Ferguson amendment wasrevised earlier in the week to cite the definition of healthinsurance in the Patient Protection and Affordable Care Act and theI.R.S. Code to limit its scope specifically to health insurers.

To further insulate other forms of insurance, other provisionswere added to specifically exempt life and P&C insurance.

In other industry reactions, Ben McKay, PCI senior vicepresident of federal government relations, says, “We appreciateGosar recognizing that repealing McCarran-Ferguson for property andcasualty insurers would not provide any benefits to the consumer orthe insurance marketplace.”

Jimi Grande, NAMIC senior vice president, federal and politicalaffairs, adds, “The main legislation is a great step forward formedical malpractice reform.”

But, he says, “NAMIC will strongly oppose any effort to repealthe very limited anti-trust exemption provided for the property andcasualty insurance industry under McCarran-Ferguson, and weappreciate Rep. Gosar's willingness to listen to our concerns andprovide additional clarity that ensured that his amendment was nottargeting property/casualty insurance.”