House Okays Repeal Of Health Insurers' Antitrust Exemption

NU Online News Service, Feb. 24, 4:08 p.m. EST

WASHINGTON–The House today overwhelmingly approved legislation repealing the antitrust exemption afforded health insurers through the McCarran-Ferguson Act–but further action on the legislation is unlikely.

Approval for the "Health Insurance Industry Fair Competition Act" came on a 406-19 vote. The measure did not repeal the antitrust exemption for medical malpractice insurers.

A provision in earlier versions of the legislation was knocked out that would have allowed health insurers and medical liability carriers to share historical data and the performance of actuarial services–a move condemned by Republicans before the vote was taken.

The original bill was reported out by the House Judiciary Committee last October after an amendment sponsored by Rep. Dan Lungren, R-Calif., was added that would have allowed health and medical liability insurers to share data. The entire provision was included in healthcare reform legislation passed by the House in December.

However, provisions repealing the antitrust exemption afforded medical liability insurers, as well as the provisions regarding sharing of data, were not included in the bare-bones version of the legislation that was the subject of debate on the House floor Wednesday. That was the primary focus of a heated debate on the floor of the House.

Because it is not in the current bill, Rep. Dan Lungren, R-Calif., said during debate on the bill on the House floor that it is "entirely possible that as currently drafted," the bill "will have precisely the opposite effect of its stated intention."

And, Rep. Lamar Smith, R-Texas, the ranking minority member of the House Judiciary Committee, also noted that he doesn't see how the bill would do anything to reduce the cost of health care.

The bill had the support of the Obama administration. The Office of Management and Budget yesterday issued a statement from the administration voicing support for the bill.

It was taken up by the House as part of an effort by the House Democratic leadership to salvage components of sweeping health care reform legislation, which is floundering due to unified Republican opposition, by taking them up piecemeal.

However, insurance industry lobbyists said the bill is unlikely to see the light of day in the Senate because of a lack of support.

The legislation is sponsored by Rep. Tom Perriello, D-Va., and Rep. Betsy Markey, D-Colo.

Rep. Louise Slaughter, D-N.Y., chairman of the House Rules Committee, managed the bill on the House floor on behalf of the House Democratic leadership.

She said, "We've heard too many complaints about the health insurance industry engaging in price-fixing, bid-rigging, and other anti-consumer and anti-competitive practices."

She added, "This industry has enjoyed a big giveaway for far too long, and it's about time that it plays by the same rules as everyone else."

America's Health Insurance Plans, which represents most of the nation's health insurers, said in a statement sent to all members of the House that the bill "is likely to do more harm than good."

In a statement, AHIP officials said that the rhetoric surrounding the call for repealing the antitrust exemption afforded health insurers through the McCarran-Ferguson Act "does not match the reality of the situation."

Absence of the provision allowing insurers to share historical data stirred up the most fireworks during the House floor debate.

Rep. Lungren, a former attorney general of California, said the economics of the insurance industry are such that companies depend upon information in order to enable them to price their products.

"And here is the rub–it is the small companies which depend on the availability of information the most," he argued.

"Smaller companies simply do not have a sufficiently large volume of information to price their products efficiently," he said.

"It is for this reason that it is of the utmost importance that insurers have the ability to share historical data," he said.

In this regard, Rep. Lungren noted, a Congressional Research Service Report "raises the possibility that were such data not available to small insurance companies, we might see the ironic outcome of further concentration in the insurance industry!"