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.”
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.