Congress moves toward insurance antitrust

A Senate committee voted Wednesday to revoke the exemption protecting the U.S. health and malpractice insurance industry from federal antitrust laws, while leaders in the House of Representatives planned similar legislation.

The Senate Judiciary Committee voted 20-9 to cancel the McCarran-Ferguson exemption, a 1945 law that leaves antitrust regulation of the insurance industry to the states.

Leaders in the House of Representatives said they are considering adding a measure to eliminate the exemption in broader healthcare reform legislation.

Organizations of healthcare professionals, including the ADA and Academy of General Dentistry (AGD), have long called for repeal or modification of the act, which they say reduces competition and thus raises the cost of health and malpractice insurance.

"Subjecting health and medical malpractice insurers to federal antitrust laws would prevent collusion and could lead to more competitive reimbursement rates for providers," the AGD states on its Web site.

Insurance companies argue that collusion on insurance rates is prevented by other laws. "Because McCarran-Ferguson allows for the consolidation of loss data, it is most beneficial to small and medium size insurers that are not able to conduct meaningful analysis using only their own limited data," State Farm Insurance states on its Web site.