House votes to repeal anti trust exemption for insurance companies

February 24, 2010 — In a rare display of bipartisan unity, the US House of
Representatives this afternoon passed, by a lopsided vote of 406 to 19,
legislation that would end health insurance companies' 65-year exemption
from a variety of federal antitrust rules.

Supporters of the bill — the Health Insurance Industry Fair Competition Act,
which would repeal portions of the McCarran-Ferguson Act, passed in 1945 —
argue that it will restore competition to the health insurance market, which
surveys have shown has become increasingly dominated in many areas by 1 or 2
insurers.

"It's time for Washington to decide whether we stand with patients or
profiteering, whether we believe in market competition or a collusion
between politicians and insurance companies," said freshman bill cosponsor
Rep. Tom Perriello (D-VA) in the run-up to the vote.

But skeptics, many in the GOP, charge that the repeal will have a negligible
effect on premiums and that it will do little to address the consolidation
issue — in fact, the Federal Trade Commission and the Department of Justice
already have the authority to examine the antitrust implications of health
insurer mergers and acquisitions.

Citing the Congressional Budget Office, which predicted a small effect on
premiums because states already had laws on their books that outlaw
practices that would be prohibited under the bill, including bid rigging and
price fixing, Rep. Lamar Smith (R-TX) argued during floor debate that "some
may wish upon a star, but this bill is a dim bulb."

Still, dim bulb or not, most House Republicans were not inclined to buck the
popular backlash against insurance companies and vote against the bill.
Some Republicans who ended up voting for the bill nevertheless argued during
the procedural portion of the debate for its amendment. Among other things,
they argued for an amendment that would permit insurance companies to share
historical loss data and actuarial services — a provision, they said, that
would be especially beneficial to smaller insurance companies. The
resolution barring amendments prevailed, however, and Republicans such as
Rep. Dan Lungren of California used a portion of their floor time to argue
for what they say would be more effective cost-control legislation — medical
malpractice reform.

The bill will not affect property and casualty insurers, including medical
malpractice carriers, which will maintain their antitrust exemptions.
Action now moves to the Senate, where the measure may need a supermajority
of at least 60 votes to move forward.