In a move U.S. House leaders say will promote competition in the marketplace and additional freedom for the American people, the Congressional body has voted to strip private health insurers of their 65-year-old antitrust exemption.
On Feb. 24, the House voted 406-19 in support of the Health Insurance Industry Fair Competition Act (HR 4626), introduced by Rep. Tom Perriello (D-Va.). The bill, now headed to the Senate for its consideration, repeals the exemption under the 1945 McCarran-Ferguson Act that affords states power to control the majority of the insurance market and restrict potential for antitrust actions.
Nancy Pelosi
Following the vote, House Speaker Nancy Pelosi (D-Calif.) said in a statement that passage of the legislation “increases leverage for the people by changing the playing field, a playing field that has been dominated by the insurance industry for over 65 years and now it’s the people’s turn.”
She added that “health insurance companies will now be playing on the people’s field.”
While the Congressional Budget Office has said repealing the antitrust exemption will not significantly reduce premiums – the target of President Barack Obama’s health reform plan unveiled earlier this week – legislators view the move as another way to increase federal scrutiny, meaning a greater likelihood of preventing price fixing, bid-rigging and other market activities that can raise the cost of health coverage for consumers.
“Today we are providing much more competition, much more freedom for the American people, by expanding their choices with this important legislation,” Pelosi said. “I urge our colleagues [in the Senate] to support the legislation and once again salute all those who made it possible to bring this before the people’s house today.”
Highlighting the ‘problem’
Among the 19 votes against repealing the measure was Rep. Scott Garrett (R-N.J.), who said that the Health Insurance Industry Fair Competition Act “would create more legal and regulatory uncertainty” and thus “increased litigation and higher costs passed on in the form of higher premiums for American families.”
“Additionally, this legislation may have a negative effect on competition by prohibiting new entrants to the market and smaller insurance businesses from gaining access to enough information to accurately trend, forecast, rate or price,” Garrett said in a statement. “Finally, this legislation also has the potential to prohibit or curb new industry initiatives aimed at improving quality and efficiency while reducing costs such as data aggregation, administrative simplification, and quality measurement.”
Garrett’s objection to the measure was echoed in the health insurance industry by Karen Ignagni, president and chief executive officer of America’s Health Insurance Plans, representing more than 1,300 providers nationwide.
“In attempting to solve a problem that doesn’t exist, this legislation is the triumph of sound bites over substance,” Ignagni said. “The Congressional Budget Office has said that passage of this legislation will do nothing to reduce health care costs. Moreover, according to the National Association of Insurance Commissioners, anti-competitive ‘activities are not permitted under the McCarran-Ferguson Act and are not tolerated under state law.’ Real reform means containing costs to ensure that health care is affordable for working families and small businesses. It’s time to clear the political hurdles that stand in the way of real cost containment.”
U.S. House approves end of health insurers’ antitrust exemption via IFAwebnews.com .
No related posts.