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House Votes to End Antitrust Protections for Health Insurers

February 24, 2010 - by Donny Shaw

The House of Representatives did something thoroughly bipartisan with health care today. They voted, 406-19, to strip the health insurance industry of the exemption from federal antitrust laws that they have had since the passage of the McCarran-Ferguson Act in 1945. The bill is, known as the Health Insurance Industry Fair Competition Act is sponsored primarily by Rep. Thomas Perriello [D, VA-5] and Rep. Betsy Markey [D, CO-4], and is co-sponsored by 72 Democrats.

“It moves us in the right direction to put patients and doctors back in the driver’s seat,” Rep. Perriello said during the floor debate today. “It allows us to restore the basic sense of competition in this country. And it says, for once, working and middle class families are going to come out ahead of the special interests. Consumers are going to come out ahead of the greed mentality.”

The bill is being sold as a way to drive down premiums. But the non-partisan Congressional Budget Office doesn’t think it will work. It “could affect the costs of and premiums charged by private health insurance companies; whether premiums would increase or decrease as a result is difficult to determine, but in either case the magnitude of the effects is likely to be quite small,” they wrote in a report on a previous version of the legislation. “Enacting the legislation would have no significant effect on the premiums that private insurers would charge for health insurance.”

Here’s a thought: Could the innocuousness of the bill to the insurance industry have contributed to its wide bipartisan support, or does almost everyone in the House just think it is super awesome policy?

These were the 19 Republicans who voted against the bill:

Two more mysterious things of note about this bill: The previous version of this bill that the CBO scored (H.R. 3596) would have also repealed the antitrust exemption for medical malpractice corporations. That was dropped from the version that was passed today. The previous version was also careful to exempt the sharing of rate-setting data from the repeal so it would remain legal. As Austin Frakt and Ian Crosby at the Incidental Economist explain, “insurance companies are partially exempt from federal antitrust law for an important reason: so they can share rate-making data. This function actually benefits small insurers who would not otherwise have sufficient data to properly adjust premiums. Paradoxically, removing the legal cover for data sharing would harm small insurers more than large ones.” For some reason, the bill passed today does not contain language exempting data-sharing from the repeal like the previous version does.

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