NU Online News Service, Jan.15, 12:30 p.m. EST
Any health care legislation with language eliminating antitrust exemptions for health and medical malpractice insurers will hurt consumers, the National Conference of Insurance Legislators has warned Democratic leaders.
NCOIL's caution came in a letter written yesterday to Senate Majority Leader Harry Reid, D-Nev., and House Speaker Pelosi, D-Calif., who are at work on a compromise health care bill to combine Senate and House versions of health care reform legislation.
The NCOIL letter was a counterpoint to another written by 18 Democratic senators to Mr. Reid, Ms. Pelosi and President Obama urging an end to the exemption, stating in part, "For nearly 65 years, the insurance industry has been exempt from federal antitrust laws. Regulation of the insurance industry has been left with the states, which often lack the time and resources to effectively investigate antitrust conspiracies."
NCOIL officers wrote that they "strongly caution against" repealing the exemption in any bill. Rolling back the antitrust exemptions for health and medical malpractice insurers, as the House legislation proposes, "would increase costs while reducing competition; harm consumers by creating confusing, conflicting regulation; and ignore already existing state antitrust protections."
"Any changes to the limited antitrust exemption would not lower insurance costs for consumers but, in fact, could have the opposite effect should smaller insurers be driven from the market–particularly in communities with already limited availability and affordability of coverage," said NCOIL.
According to their letter, "the limited exemption fosters competition by granting insurers the ability to share loss history and other information, and it ensures that smaller and more regional insurers can compete with large insurers that are less dependent on industrywide data."
Any repeal, NCOIL warned, would create confusing duplicative regulation, destabilize insurance markets that rely on predictability to gauge risks and price products, and "lead to costly litigation–ultimately paid for by insurance policyholders–brought to test the limits of state authority," NCOIL wrote.
The group told the leaders that states already enforce the limited antitrust exemption granted under the McCarran-Ferguson Act and attorneys general can prosecute abuses under existing state antitrust laws.
"States in recent years have vigorously enforced their antitrust statutes to combat broker bid-rigging and other crimes–and have been well-recognized for their efforts," NCOIL noted.
It urged the leaders to "prioritize substance over timelines and to reject any McCarran-Ferguson repeal."
The letter was signed by NCOIL President and Kentucky State Rep. Robert Damron, D-Nicholasville, and NCOIL's other officers, North Dakota State Rep. George Keiser, R-Bismarck; New Mexico State Sen. Carroll Leavell, R-Jai; Indiana State Sen. Vi Simpson, R-Bloomington; and Tennessee State Rep. Charles Curtiss.
Negotiations on the bill yesterday led to an agreement by congressional leaders, the White House and labor unions on language setting a framework for a tax on so-called "Cadillac" high cost health insurance policies.
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