House Dems Press To End Insurers' Antitrust Waiver

NU Online News Service, Jan.7, 3:40 p.m. EST

WASHINGTON–House Democrats are insisting that final health care delivery reform legislation include a provision repealing the antitrust exemption afforded to healthcare and medical liability insurers.

In the draft of a letter that supporters of such a provision plan to circulate to all House Democrats, the members said that in the absence of a "public option" repealing the antitrust exemption is one obvious cost-cutting incentive tool.

The letter is being written to House Speaker Nancy Pelosi, D-Calif. and circulated to the offices of all House Democrats by Rep. Peter DeFazio, D-Oregon, and Rep. Gene Taylor, D-Miss.

It urges the House leadership to insist that the House language to repeal the health insurance and medical liability insurance exemption from federal antitrust laws be in the final bill.

Such a provision is included in the House version of the health care bill. A similar provision was deleted from the Senate version in order to get the vote of Sen. Ben Nelson, D-Neb., a former state insurance commissioner and the critical 60th vote for the Democrats.

The issue was also raised in comments by House Democratic leaders in a meeting yesterday with President Obama and other administration officials at the White House.

Rep. Louise Slaughter, D-N.Y., who calls the exemption, "terrible," and asks "Why should they be exempted?" raised the matter during the White House meeting.

She added that "The exemption should
have been lifted 30 years ago, or should never have been put on in the first place."

Similar comments were voiced earlier by Rep. Chris Van Hollen, D-Md., who is an assistant to Speaker Pelosi.

He said it would be an important concession sought from the Senate as reconciliation of the health care bill continues, "especially if you were not to have a public option, that would be
important," Van Hollen said.

"The whole purpose of getting rid of the
exemption would be to make sure you police competition so you cannot collude," he said.

The letter also insists that as part of any compromise they want to see a provision in their antitrust language giving the Federal Trade Commission the authority to collaborate with the U.S. Department of Justice in investigating the insurance industry by permitting the FTC to investigate health insurers and medical malpractice insurers.

The final language in the House bill dealing with the FTC is a compromise. Earlier versions gave the FTC the authority to investigate and create reports on all components of the insurance industry.

"One tool that stands out for attracting strong bipartisan support is removing the current antitrust exemptions enjoyed by the health insurance industry," the letter says.

It notes that an October Rasmussen poll found that 65 percent of Americans favored removing the anti-trust exemption for health insurance companies. Democrats supported subjecting insurance companies to antitrust laws by a seven-to-one margin, the letter added.

It also said that 64 percent of independent voters and 58 percent of Republicans also believe insurers should abide by antitrust laws. "Asking health insurance companies to play by the same rules as every other company in America gets significant support across party lines," the letter said.

The letter added that since the McCarran Ferguson Act providing the exemption was passed in 1954, "regulation of the insurance industry has since been left largely to the states, which suffer from a lack of resources to go after offenders, as well as a patchwork of 50 different state regulatory regimes with inconsistent enforcement."

Joel Kopperud, a director of government relations at the Council of Insurance Agents and Brokers, reacted to the letter by saying, "We're very concerned that members of congress continue to view medical liability as a health product, when in fact it's a property and casualty product, and the implications of removing the anti-trust exemption established in McCarran-Ferguson would be significant to the entire industry."

"We have a very small window here to educate lawmakers on this, and we're working closely with everyone we can to do just that," he added.

Marliss McManus, a senior federal affairs director for the National Association of Mutual Insurance Companies, said, "today, as in 2007, proponents of a repeal demonstrate a lack of understanding about McCarran and the nature of insurance."

She explained that the limited antitrust exemption was established in the McCarran-Ferguson Act to provide greater access to data for insurance companies so that they could more accurately determine the risks involved and set their prices accordingly.