Eliminate the antitrust exemption for health insurance companies (Rep. Eddie Bernice Johnson)


Many, many Americans are struggling right now, as the recession grinds on and unemployment continues to hover at just under ten percent. Family budgets are stretched to the breaking point in homes across the country, and they can't absorb sharp increases in health care costs. Congress will continue to work with the Obama administration to develop comprehensive legislation to overhaul and improve our health care system -- legislation that we can pass in the extremely bitter and partisan climate in Washington. In the meantime, we can pass simple, commonsense bills like the Health Insurance Industry Fair Competition Act, which my colleagues, Representatives Tom Perriello and Betsy Markey introduced on Monday, and which I have co-sponsored.

The Health Insurance Industry Fair Competition Act will do something very simple -- it will amend the McCarran-Ferguson Act, a law put in place in 1945, to subject health insurance companies to federal antitrust laws. Currently, only two industries are exempt from antitrust laws -- health insurance and Major League Baseball.

Some opponents of this legislation argue that regulation of health insurance companies should be left to the states. But the truth is that state insurance commissioners do not have the resources to address the fraudulent conduct of insurance companies. In the more than 50 years that the states have had regulatory authority over the health insurance industry, no state commissioner has ever brought an action against any health insurance company for anticompetitive conduct. Furthermore, more than 40 percent of the private health insurance market is made up of employer-sponsored health plans, and the states don't have authority over them at all.

The Obama administration has expressed support for eliminating the exemption, as did a bipartisan commission appointed by President George W. Bush, the Antitrust Modernization Commission. In 2007, the National Association of Attorneys General passed a resolution supporting the repeal of McCarran-Ferguson with overwhelming bipartisan support.

Profits for the ten largest insurance companies rose 250 percent between 2000 and 2009 -- ten times faster than inflation. In the last 14 years, there have been 400 mergers in the health insurance industry, and in most states, one or two insurers dominate the market. Furthermore, because we have no history of federal enforcement actions against anticompetitive conduct, we don't have a full understanding of the anticompetitive practices of insurance companies -- and anyone who has tried to understand his or her own insurance policy knows that health insurance products are extremely complex. Eliminating the antitrust exemption would thus enable the federal government to ensure that health insurance companies, which have thrived as the rest of the economy has gone under, are doing right by their customers.

I expect the Health Insurance Industry Fair Competition Act to pass, and to do so with support from both sides of the aisle, because ending deceptive and anticompetitive corporate conduct hurts all Americans and simply shouldn't be a political issue. Furthermore, I support eliminating the antitrust exemption for insurance companies for the same reason that I have supported the public option throughout our national debate on reforming care -- it represents meaningful reform, the kind that will actually benefit American families.

Cross-posted from The Huffington Post

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