MESSAGE
| DATE | 2010-02-24 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [NYLXS - HANGOUT] The Only significant Issue in the Healthcare bill
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February 23, 2010, 3:44 PM
White House Urges Repeal of Insurers’ Antitrust Exemption
By PETER BAKER
4:56 p.m. | Updated
President Obama called on Tuesday for repealing the health insurance
industry’s exemption from federal antitrust laws, escalating his
attack on insurers as he tries to revive his stalled effort to overhaul
the nation’s health care system.
The White House sent Congress a statement throwing its weight behind a
House bill to overturn parts of the McCarran-Ferguson Act of 1945, which
granted insurance companies broad protection from federal monopoly
oversight and left regulation of the industry largely to state
governments.
The president’s move came a day after he proposed a new effort to
crack down on insurers that are raising premium rates dramatically, part
of a comprehensive health care plan that he posted on the White House
Web site before a bipartisan summit meeting on Thursday. But the
antitrust repeal was not included in Mr. Obama’s overall plan on
Monday; it was instead left to the separate House legislation.
“Removing this exemption will allow appropriate enforcement and
examination of potential policies that might prove uncompetitive, might
stifle competition,†said Robert Gibbs, the White House press
secretary. “And we think this better promotes affordability and
innovation through greater choice and less market concentration.â€
The proposed repeal has strong support among House Democrats, who
included a version of it in the broader health care bill passed by the
House last year. But the fate of the repeal remains uncertain in the
Senate, where Democrats did not incorporate it into their health care
legislation. Critics noted that mergers and some business practices were
already subject to federal oversight and said that repealing
McCarran-Ferguson provisions would do nothing to lower health care
costs.
“The rhetoric surrounding repeal of McCarran-Ferguson does not match
the reality of the situation,†said Karen Ignagni, president of
America’s Health Insurance Plans, an industry group. “Health
insurance is one of the most regulated industries in America at both the
federal and the state levels.â€
Mr. Obama signaled last October that he was interested in the issue when
he said in a weekend radio and Internet address that Congress was right
to study a possible repeal. At the time, he complained that insurers
were gouging customers and executives were “earning these profits
and bonuses while enjoying a privileged exemption from our antitrust
laws.â€
His statement on Tuesday represented the first time he had taken a
formal position. Mr. Gibbs said the idea was not put into the overall
health care plan posted on Monday because strategists believed there
could be a bipartisan majority for repealing the exemption, separate
from the main legislation.
The standalone repeal bill was devised as the first salvo in a
dual-track strategy by Representative Nancy Pelosi, the California
Democrat and House speaker, to advance elements of a health care
overhaul one by one in case the comprehensive effort ultimately does not
go forward.
Ms. Pelosi and Representative Louise M. Slaughter, Democrat of New York,
pressed Mr. Obama for support during a private meeting last month,
according to Congressional aides. “This industry has enjoyed a big
giveaway for far too long,†Ms. Slaughter said in a statement after
the president’s announcement Tuesday, “and it’s about time
that it plays by the same rules as everyone else.â€
The Democratic leadership allowed the latest version of the bill to be
introduced on Monday by Representatives Tom Perriello of Virginia and
Betsy Markey of Colorado, two freshman Democrats who voted on opposite
sides on the larger health care legislation last year. Under the bill,
health insurers would no longer be protected from liability for
price-fixing, bid-rigging or dividing up market territories, according
to the sponsors.
But after industry lobbying, the new version would not affect medical
malpractice insurers.
About 95 percent of health insurance markets in the nation are
“highly concentrated,†meaning that customers have only one or a
few insurers to pick from. Proponents of repealing the antitrust
exemption argue that such concentration has created an anticompetitive
situation permitting huge premium increases.
But the Congressional Budget Office, a nonpartisan agency, reported in
October that repealing the antitrust exemption for health insurers would
not make a huge difference in premiums, in part because state laws
generally already barred the activities prohibited by the federal bill.
In terms of premiums, the report said, “the magnitude of the effects
is likely to be quite small.â€
Moreover, a Congressional Research Service report last month said that
repealing the exemption could open the door to a flood of lawsuits
challenging various insurer practices and could harm smaller insurers
that share data because they do not have large pools of information of
their own. If the result is that small insurers can no longer share
information, the report said, “further consolidation in the
insurance industry†would be “a likely, albeit ironic,
possibility.â€
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