Congress mulls insurance antitrust bills

Sep 27, 2009

Legislation introduced in both houses of the U.S. Congress this month would strike down provisions of the McCarran-Ferguson Act that partially exempt the insurance industry from federal antitrust laws.

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.

The AGD offered the following analysis of the bill's prospects:

While there is a great deal of interest in overturning the McCarran-Ferguson Act and significant chatter that such a provision could be included in healthcare reform, there also is strong support for the antitrust exemption from the insurance industry. Additionally, including an overturn of the McCarran-Ferguson Act in healthcare reform could be excessively complicated. If such language were included in the text of the healthcare reform bill, it would have to be referred to the Judiciary Committees in the House and the Senate, historically two very contentious, partisan committees. It also could complicate the already difficult job of cobbling together enough votes to pass healthcare reform.

The bill was introduced in the House by Rep. John Conyers Jr. (D-MI), Rep. Hank Johnson (D-GA), and Rep. Diana DeGette (D-CO). It was introduced in the Senate by Sen. Patrick Leahy (D-VT).