HealthCMi

GOP Joins Dems to Breakup Insurance Monopolies

The US House of Representatives has passed the ‘Health Insurance Industry Fair Competition Act’ by a vote of 406 to 19. This legislation repeals antitrust protections enjoyed by the health insurance industry. This is an overwhelming majority vote supporting the repeal of longstanding antitrust exemptions for insurance companies and the bill has over 70 cosponsors. Representing the 5th district of Virginia, Congressman Tom Periello sponsored this bill to end monopoly protections for health insurance companies.



The McCarran-Ferguson Act of 1945 gave insurance companies exemption from antitrust laws allowing them to legally fix prices, collude with one another, and to divide market turf amongst themselves. Spokesmen from several branches of the insurance industry oppose this legislation with many asserting that it will not help to control rising healthcare costs. The Consumer Federation of America (CFA) estimates that this legislation will save Americans approximately $5 billion per year. President Obama favors repealing antitrust protections for insurance companies.



In an interesting twist, the Senate has not stated whether or not it will consider this legislation despite its massive bipartisan support in the House. The ‘Health Insurance Industry Fair Competition Act’ (HR 4626) is only two pages of text in contrast to the enormous healthcare bill recently stalled in the US Senate. It seems the US House of Representatives has passed a simple, clean bill that anyone can read in a matter of minutes. A total of 253 Democrats voted in favor of the legislation joined by 153 Republicans. The only nays came from a small group of 19 Republicans. The act sailed through the House in merely two days providing easy passage. Surprisingly, the passage of this historic act has received muted attention by the press.



Opinion polls consistently point to frustration amongst Americans over the lumbering and inefficient process of passing legislation marred by corruption from lobbyists. Equally unpopular are amendments loaded with pork that weigh down legislation and drive up costs. This act moved swiftly and lacks any costly amendments. As a test to the Federal process, should this bill move through the Senate it would represent a breakthrough of the gridlock that hampers the US government and fosters rewards for special interest groups over US citizens.



The official US House of Representatives long title of this act is “To restore the application of the Federal antitrust laws to the business of health insurance to protect competition and consumers.” The exact text of the bill reads:



(a) Amendment to McCarran-Ferguson Act- Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), commonly known as the McCarran-Ferguson Act, is amended by adding at the end the following:



(c) Nothing contained in this Act shall modify, impair, or supersede the operation of any of the antitrust laws with respect to the business of health insurance. For purposes of the preceding sentence, the term `antitrust laws' has the meaning given it in subsection (a) of the first section of the Clayton Act, except that such term includes section 5 of the Federal Trade Commission Act to the extent that such section 5 applies to unfair methods of competition.'.



(b) Related Provision- For purposes of section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section applies to unfair methods of competition, section 3(c) of the McCarran-Ferguson Act shall apply with respect to the business of health insurance without regard to whether such business is carried on for profit, notwithstanding the definition of `Corporation' contained in section 4 of the Federal Trade Commission Act.

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