Never underestimate the political advantage of beating up on the insurance industry. This message was evident as the House of Representatives voted 406-19 to repeal the limited federal antitrust exemption for health insurers under the McCarran-Ferguson Act.
To understand why this measure passed, you need to examine the political context. The House vote occurred as the final push by Democrats who support healthcare reform was gathering steam. January had begun with Democrats having passed versions of a health bill in both the House and the Senate. All that remained was for the two versions of the bill to be merged and a consensus version passed by both chambers.
Then, Republican Scott Brown won the Senate seat held for 47 years by Edward M. Kennedy, denying the Democrats the 60th vote they needed to halt Republican filibusters. In late December, the Senate had passed a healthcare reform bill with exactly 60 votes.
Suddenly, the Democrats seemed to be in disarray. There was even talk of abandoning comprehensive healthcare reform and passing reform measures piecemeal. The first piece was one they figured Republicans couldn't afford to oppose politically: a repeal of McCarran-Ferguson for health and medical malpractice insurers.
After talking about a repeal bill for weeks, the Health Insurance Industry Fair Competition Act (H.R. 4626) was released on Feb. 22 and passed 2 days later in the House. The timing was fortuitous in one respect: The weeks that the draft bill spent under wraps allowed PIA and other participants in an ad-hoc property-casualty coalition to successfully lobby for the exclusion of medical malpractice insurers.
During the 2-day span between the introduction and passage of H.R. 4626, President Barack Obama strongly endorsed it, releasing a statement laden with rhetoric critical of the insurance industry. This came as the President proposed to give the federal government the power to deny health insurers' rate increases. All of this happened days before Democratic and Republican leaders were to meet in a televised forum on healthcare.
Although the final bill signed into law excluded the repeal, the salient fact is that the House vote was 406-19. Congress only votes by such margins when there is overwhelming public sentiment for something. This sets a dangerous precedent for the next time a member of Congress wants to scapegoat the insurance industry for political gain. The industry ignores this at its peril.
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