By Alexander Bolton - 01/14/10 01:20 AM EST
Nineteen Senate Democrats on Wednesday called for the health insurance industry to lose its long-held anti-trust exemption after news surfaced that insurance companies have spent millions in a concealed effort to oppose healthcare reform.
President Barack Obama also signaled that he would support repealing anti-trust exemptions for insurance companies, according to a report in the Associated Press.
Insurance companies such as Aetna, Cigna and UnitedHealth Group poured as much as $20 million into the U.S. Chamber of Commerce to fund ads attacking the healthcare bill, according to a report in National Journal.
While spending millions in private to oppose the bill, insurance companies adopted publicly neutral stance, perhaps fearing a backlash from Democrats in the White House in Congress.
Democrats vented their criticism of the insurance industry Wednesday.
Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and 18 Democratic colleagues released a letter calling for the final health bill to include a provision stripping the insurance industry of its exemption.
“There is simply no reason for health insurance and medical malpractice insurance companies to be exempt from Federal laws prohibiting price fixing, bid rigging, and market allocation,” the lawmakers wrote. “These acts hurt consumers, drive up health care costs, and should be prohibited in the health insurance industry, as they are in virtually every other industry.”
A spokeswoman for Leahy said the release of the letter after lawmakers learned about the industry’s secret spending campaign was purely coincidental.
The aide noted that Leahy first introduced legislation to repeal the anti-trust exemption in September.
Liberal advocacy groups have also blasted the industry and its trade association, America’s Health Insurance Plans (AHIP).
“AHIP has paid lip service to reform while paying the Chamber to oppose it,” said Richard Kirsch, national campaign manager of Health Care for America Now, a coalition of liberal and labor groups.
“Insurers rigged and gamed the political system the same way they do with people’s health insurance claims and medical care,” he said “We simply cannot trust the health insurance industry to act in anyone’s best interest but its own.”
But major health insurance companies represented by AHIP say they are not at all worried about the Democrats’ threat to end their anti-trust exemption.
“We could care less,” said an industry source.
The industry source said that repealing the anti-trust exemption would impact property casualty insurers that share information to set rates. Large healthcare companies that have many policyholders would have enough internal data to operate without much disruption, the source said.
A Senate GOP aide said Democrats were raising a battle cry over the anti-trust exemption for purely rhetorical purposes: to paint the industry as unfair to consumers.
“Democrats are rolling this proposal out because they want to make this a debate about the insurance industry instead of the demerits of their [healthcare] bill,” said the aide.
“Why Democrats are spending time discussing a provision that the Congressional Budget Office has found won’t lower the cost of healthcare for a single American is a mystery,” the GOP aide added. “Trying to make the insurance industry the face of their opposition will be a futile effort.”
Senate Democrats, however, insist that repealing the anti-trust exemption will create greater competition and lower costs.
“While there are divergent views on the best way to introduce choice and competition into health insurance market, we can surely agree that health and medical malpractice insurers should not be allowed to collude to set prices and allocate markets,” the lawmakers wrote.
The Democratic senators wrote they anticipate working with leaders to include a repeal of the antitrust exemption in the final healthcare reform bill.
Obama, Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) received copies.
To include the measure in the final bill, lawmakers must overcome the opposition of Sen. Ben Nelson (D-Neb.), a crucial swing vote in the upper chamber.
A spokesman for Nelson said his boss opposes repealing the exemption because doing so would not affect large health insurance companies but hurt smaller companies that depend on data sharing.
The Nelson aide said repealing the exemption would only make it tougher for smaller companies to compete.
Nelson has discussed working on a compromise with Leahy but does not intend for it to become attached to the healthcare bill now in negotiations between the Senate and House, said the aide.