There's been a lot of talk in Washington by some angry members of Congress about stripping the industry of its sacred cow–the McCarran-Ferguson Act, which gives insurers the ability to sidestep federal antitrust laws so they can share data and set more accurate rates. (At least that is the theory.) NU Washington Editor Dave Postal, however, suggests that despite all the hub-bub about how horrible the industry is behaving, any change in the law is way off–if it ever comes to pass.
In his column in the upcoming, Aug. 20 edition of NU, Dave notes that despite making some powerful enemies on both sides of the political aisle, McCarran modification, let alone repeal, is far from a sure thing.
Is it possible that a bill targeting McCarran-Ferguson–”with FTC oversight the piece de resistance”–will be reported out by the Senate Judiciary Committee this year or next, Dave asks. Of course it is, he says.
“However, before you lose any sleep over this, keep in mind that enactment of such legislation is another story,” he writes.
An industry lobbyist told Dave “it will be hard to get to the finish line with such legislation,” mainly because repeal of McCarran currently lacks the 60 votes needed to get through the Senate without any procedural cahllenges.
While he reports that “the votes in theory exist to report out such legislation from the Senate Judiciary Committee,” practically speaking, his lobbyist source doubts the Senate leadership will force Democrats on the committee to walk the plank to support McCarran repeal, especially since no one seems to care about the issue in the House.
Besides, the lobbyist told him, “a number of senators do attempt to get along with the insurance industry on many issues, and arent looking to pick a political fight on a bill not likely to be enacted.”
Action on a McCarran bill in September would be problematic in any case, Dave notes, “with Congress facing a huge backlog of must-do, yet vexing issues when members return, and few legislative days to deal with them due to religious holidays and the difficulty of starting up again after a months break.”
Most telling, however, was some historical perspective provided by the lobbyist, who recalled to Dave that back in in 1992 and 1993, “when then-Rep. Jack Brooks, D-Texas, headed the House Judiciary Committee, he sought to introduce legislation repealing McCarran-Ferguson. The industry responded by entering into intense negotiations with his staff over potential safe harbors, the lobbyist said–talks that died down as political support for such legislation evaporated.”
By contrast, Dave reports, “such talks are not currently underway, the lobbyist noted–an indication the industry believes that despite the threat, maintenance of McCarran-Ferguson in its current form is 'manageable.'”
“In other words,” Dave wrote, “if the threat of repeal becomes elevated, it will manifest itself through a scrambling of industry trade groups and lawyers to create task forces to draft safe harbors and negotiate details with Judiciary Committee staff. Since there are no signs of that happening yet, this process still has a very long way to go.”
What do you folks think?
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