House Approves Bill That Would Eliminate Anti-Trust Exemption for Health Insurance Industry

iStock_000006618875XSmall1.JPGOn Wednesday, the House of Representatives overwhelmingly approved by a 406-19 margin legislation that would repeal the anti-trust exemption in place for health insurance companies. On February 23, Reps. Thomas Perriello (D-VA) and Betsy Markey (D-CO) introduced the Health Insurance Industry Fair Competition Act (H.R. 4626), a measure that would amend the McCarran-Ferguson Act of 1945, which reaffirmed that states are the primary regulators of insurance, and expressly exempted the “business of insurance” from antitrust laws. Specifically, the bill would add the following sections to the McCarran-Ferguson Act to restore the application of anti-trust laws to the health insurance industry:

(c) Nothing contained in this Act shall modify, impair, or supersede the operation of any of the antitrust laws with respect to the business of health insurance. For purposes of the preceding sentence, the term `antitrust laws' has the meaning given it in subsection (a) of the first section of the Clayton Act, except that such term includes section 5 of the Federal Trade Commission Act to the extent that such section 5 applies to unfair methods of competition.

(b) Related Provision- For purposes of section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section applies to unfair methods of competition, section 3(c) of the McCarran-Ferguson Act shall apply with respect to the business of health insurance without regard to whether such business is carried on for profit, notwithstanding the definition of `Corporation' contained in section 4 of the Federal Trade Commission Act.

The Perriello-Markey bill – which is co-sponsored by 71 other members of Congress – is also supported by President Obama. In a statement of policy, (pdf) the White House said:

The Administration strongly supports House passage of H.R. 4626. The repeal of the antitrust exemption in the McCarran-Ferguson Act as it applies to the health insurance industry would give American families and businesses, big and small, more control over their own health care choices by promoting greater insurance competition. The repeal also will outlaw existing, anti-competitive health insurance practices like price fixing, bid rigging, and market allocation that drive up costs for all Americans. Health insurance reform should be built on a strong commitment to competition in all health care markets, including health insurance. This bill will benefit the American health care consumer by ensuring that competition has a prominent role in reforming health insurance markets throughout the Nation.

In a White House press briefing, press secretary Robert Gibbs added: “[a]t its core, health reform is all about ensuring that American families and businesses have more choices, benefit from more competition, and have greater control over their own health care. . . Repealing this exemption is an important part of that effort.”

This entry was written by Ilyse Schuman.

Photo credit:  MBPHOTO, INC.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.