Insurer antitrust exemption would end under House bill

But the move would not increase competition among health plans, said an insurance industry association, citing nonpartisan research.

By Doug Trapp — Posted March 9, 2010

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The House again adopted legislation that would more fully apply federal antitrust laws to the health insurance industry, but critics said the bill would neither improve competition nor lower premiums.

On Feb. 24, the House voted 406-19 to adopt the Health Insurance Industry Fair Competition Act. No Democrats voted against the measure, which is supported by President Obama. At this article's deadline, the Senate had not acted on the bill.

The measure would repeal parts of the 1945 McCarran-Ferguson Act, which allows health plans to collaborate on the "business of insurance," such as conducting risk assessment of health plan subscribers. The Fair Competition Act would end this exemption from federal antitrust regulations. The House approved a measure similar to the Fair Competition Act as part of the health reform bill it adopted Nov. 7, 2009.

"Today, we sent a simple message: Health insurance companies must compete for business like everyone else," said Rep. Tom Perriello (D, Va.), the stand-alone bill's sponsor.

But a Congressional Budget Office analysis of a similar measure in October 2009 concluded it would "have no significant effect on the premiums that private insurers would charge for health insurance."

"This legislation is the triumph of sound bites over substance," said Karen Ignagni, president and CEO of America's Health Insurance Plans.

The American Medical Association does not support or oppose the newest antitrust bill. But, AMA President J. James Rohack, MD, said, "more needs to be done to address consolidation in the health care market."

Rep. Dan Lungren (R, Calif.) said the Fair Competition Act actually might lead to greater health insurance industry consolidation, because it would end insurers' ability to share past transaction information. Small insurers rely on these cost data to price their plans properly. So the bill could encourage small firms to merge, Lungren said.

An amendment by Lungren would have allowed sharing past price information, but a motion to allow consideration of the amendment was rejected on a party-line vote of 249-170.

Despite House approval of the bill, the measure is in the same legislative limbo as comprehensive health system reform in the Senate, said David Carle, a spokesman for Senate Judiciary Committee Chair Patrick Leahy (D, Vt.). For years, Leahy has supported legislation similar to the Fair Competition Act. The measure still could be included in a larger reform bill or considered separately.

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