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Since 2008 – Progress Through Politics

Bill to Remove Insurance Industry's Anti-Trust Exemption Introduced – Open Thread

As Navy Blue Wife explained in her excellent diary, the McCarran-Ferguson Act of 1945 holds an anti-trust exemption allowing individual states to regulate insurance companies instead of the Federal government. However, this same Act also states that so long as the state regulates the industry, the federal anti-trust laws will not be applicable. This has given the Health Insurance Industry an unfettered market in which to expand, unchecked by the laws that prevent other businesses from monopolizing. This has led to decades of actions by the Insurance industry that, without that exemption, would be in violation of federal law. The end result is higher cost to the customer.

John Conyers (D-MI), Hank Johnson (D-GA) and Diana DeGette (D-CO) have introduced a bill that will end the anti-trust exemption for the insurance industry and give the Federal government the power of regulation and enforcement.

From C & L:

“This legislation would specifically prohibit price fixing, bid rigging, and market allocation in the health insurance industry,” said Conyers. “These pernicious practices are detrimental to competition and result in higher prices for consumers. Conduct that is unlawful throughout the country should not be allowed for insurance companies under antitrust exemption. The House Judiciary Committee held extensive hearings on the effects of the insurance industry’s antitrust exemption throughout the 1980s and early 1990s. It became clear then that policyholders and the economy in general would benefit from eliminating this exemption.

“The legislation we introduced today is intended to root out unlawful activity in an industry grown complacent by decades of protection from antitrust oversight. In doing so, we aim to make health insurance more affordable to more Americans. I want to thank my friend Senator Leahy for his leadership on the bill and for working with the House on this joint introduction.”

From Patrick Leahy’s (D-VT) website:

As the Senate prepares to consider comprehensive health care reform legislation, Leahy introduced the Health Insurance Industry Antitrust Enforcement Act to repeal the antitrust exemption that was established in the 1945 McCarran-Ferguson Act.

Based on the fit the Insurance Industry pitched in ’07, this ought bring forth considerable wailing and gnashing of teeth.

I can’t wait.


  1. HappyinVT

    Hate to rain on the parade, (21+ / 0-)

    but McCarran-Ferguson has been one of my pet hobbies since I first learned of it in law school. Pete DeFazio and Pat Leahy have been introducing this bill for years now only to find it tabled in congress, no matter which party was in charge. I wouldn’t put too much into this. It’s headed for subcommittee hell like it is every time its introduced.

     daily kos comment

    Not saying this isn’t a good thing to happen.  And, perhaps with all the attention on healthcare reform this time will be different.  At the very least it makes the insurance industry spend even more money defending its current practices.  Although they’ll likely make it up in higher premiums and fewer payouts.

  2. Hollede

    House Representative Michele Bachmann has a different idea.

    Wow. She wants to totally deregulate the health insurance companies? Think things are bad now? Just wait for Bachmanns America.

  3. anna shane

    we’re starting to get some competence results in, this for example. And Barack today announced that the US will help other nations fight the flu, not just worry a about ourselves.  It’s starting to show more.  I bet his cred’s will rise with these kinds of smart moves.  

  4. NavyBlueWife

    They may not get it passed as a single bill, but it may be rolled into broader legislation and/or reconciliation if it goes that route.  Obama can’t possibly regulate the industry as he says he wants to because this roadblock will consistently stand in the way anytime the DOJ brings about regulation matters in a judicial process.  The insurance industry is counting on this ace in the hole, so imho, they have to repeal it…should do so for all, but I’m okay with starting with the health insurance industry alone.

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