Congress to Tackle Measure Targeting Health Insurance Monopolies
Feb. 8, 2010 – Saying they want to increase competition and make health insurance more affordable, two Democratic lawmakers last week introduced legislation removing federal anti-trust exemptions from health insurance companies.
Claiming the government-supported monopoly for health insurers results in higher health insurance premiums for consumers, U.S. Representatives Tom Perriello (D-Virginia) and Betsy Markey (D-Colorado) recently announced their intent to introduce a measure removing the federal anti-trust exemption enjoyed by health insurers and medical malpractice companies. The anti-trust exemption only makes it easier for health insurers to collude and establish higher premiums while facing little real competition, the lawmakers contend.
“The current health care system is crushing our families and businesses. Support for removing this unfair exemption cuts across party lines, and is a major piece of common ground that I’ve been working toward in our country’s health care debate,” Rep. Markey said in a news release. “This is about bringing sorely-needed competition back into an industry that has for too long wielded monopoly control over hard-working American families.”
The so-called Markey-Perriello bill would remove anti-trust exemptions the two freshman lawmakers claim enable executives at health insurance companies to set unreasonably high health insurance premiums, stake out market territories within individual states and rigging bidding on group health insurance contracts. The pair also claim some 400 mergers among health insurance companies during the past 14 years has concentrated about 95 percent of the nation’s health insurance markets in too few hands.
The proposed measure would repeal the 1945 McCarran-Ferguson Act, which allows states to regulate insurance companies unless federal lawmakers enact legislation specifically designed to regulate the nation’s insurance industry. House Speaker Nancy Pelosi (D-California) last week said the measure likely would be debated this week on the floor of the U.S. House of Representatives.
Markey and Perriello contend the anti-trust exemption for health insurance companies has resulted in health insurance premiums more than doubling over the prior decade, but critics say otherwise. A study conducted last year by the nonpartisan Congressional Budget Office suggests repealing the McCarran-Ferguson Act would have no discernable outcome and might result in higher insurance premiums rather than lowering them.
Some state insurance regulators say placing federal officials in control of insurance regulation would siphon away funds from already cash-strapped state general funds. Other critics suggest removing anti-trust exemptions simply would play into the hands of the nation’s largest health insurance companies, which aren’t as reliant upon other insurers for health-related information necessary to establish suitable health insurance premiums. The net effect would be to drive out smaller health insurance companies and create an even greater monopoly among the nation’s largest health insurance companies, some critics contend.
Regardless its outcome, leading Democrats on Capitol Hill are anxious to at least appear to be moving forward with national health care reform President Obama previously stated was his “number one” domestic priority but whose efforts were derailed by Republican Scott Brown’s recent upset victory over early favorite Martha Coakley in Massachusetts’ special election to fill the U.S. Senate seat vacated upon the recent demise of the late Edward Kennedy.