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Health Care Antitrust Bill Advances

October 21, 2009 - by Donny Shaw

One week after getting a big endorsement from Senate Majority Leader Harry Reid [D, NV], the Health Insurance Industry Antitrust Enforcement Act on Wednesday lurched forward in the legislative process. Bloomberg reports:

The U.S. House Judiciary Committee voted to repeal the insurance industry’s federal antitrust exemption in a move aimed at spurring competition and controlling the cost of premiums.

The panel, in a 20-9 vote, approved legislation to ban companies from engaging in price fixing, bid rigging and market allocation. The measure may be combined with a proposed overhaul of the health-care system the House is considering.

All Democrats on the committee voted in favor of the bill, as did three Republicans — Rep. Louis Gohmert [R, TX-1], Rep. Daniel Lungren [R, CA-3] and Rep. Thomas Rooney [R, FL-16].

You can read more about the insurance industry’s longstanding exemption from federal antitrust laws here.

There has also been talk recently in the Senate of moving ahead with this and folding it into the broader health care reform bill. “This is something that is quite popular in the Caucus. We’ll have to wait and see what happens,” Sen. Charles Schumer [D, NY] said today after the House Judiciary vote.

It’s tough to say why the Democrats are pushing so hard on this right now. I see two possible explanations. One reason would be that they are trying to regain leverage over the insurance industry, who sort of backed out of a deal they had made to support a health care bill with an individual mandate by issuing a report saying that the bill would cause them to raise their premiums. In this case, it probably won’t ultimately end up in the bill.

The other reason would be to make up for the inevitable watering down of the public option. In order for the bill to work well and for people to like it once it’s implemented, it is crucial that it increases competition in the insurance industry. The more the public option gets watered down, the less effective of a competitor it will be. The antitrust bill could potentially help boost competition, and it doesn’t really irk the anti-government crowd that they are trying to accommodate with a weakened public option (as evidenced by the GOP cross-over votes, particularly Gohmert’s who is in an R+21 district). In this case, it would end up being included in the big reform bill.

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