DOJ Varney Questions Antitrust Exemption For Insur Cos

[Joanne98]

Source: WSJ

WASHINGTON (Dow Jones)--The Justice Department's top antitrust enforcer on Wednesday questioned the need for a long-standing federal antitrust exemption for health insurance and medical malpractice insurance companies, but she stopped short of endorsing legislation to end the exemption.

"The Department of Justice generally supports the idea of repealing antitrust exemptions," Assistant Attorney General Christine Varney said in testimony to the Senate Judiciary Committee. "However, we take no position as to how and when Congress should address this issue."

Lawmakers in the House and Senate have introduced identical bills to strip the antitrust exemption for insurance companies, which was enacted in the McCarran-Ferguson Act of 1945.

The legislation would strip the exemption for egregious violations, such as price fixing, bid rigging and market allocation.

The bill's text indicates that it wouldn't affect the ability of states to regulate the insurance business.

Varney said repealing the exemption "would allow competition to have a greater role in reforming health and medical malpractice insurance markets than would otherwise be the case."

"There are strong indications that possible justifications for the broad insurance antitrust exemption in the McCarran-Ferguson Act when it was enacted in 1945 are no longer valid today," she said.

Sen. Charles Schumer, D-N.Y., called on his colleagues to add the antitrust legislation as an amendment to the health-care bill that Sen. Majority Leader Harry Reid, D-Nev., plans to bring to the floor later this month.

Reid made an appearance at Wednesday's hearing and offered strong support for stripping the antitrust exemption.

"Let's get this out of committee as quickly as possible and let's pass it," Reid said.


Read more: http://online.wsj.com/article/BT-CO-20091014-711740.html

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WOW!

[Howardx]

1. playing a little hardball

good to see

[Joanne98]

2. End to insurers' antitrust exemption proposed

WASHINGTON (MarketWatch) -- Virtual monopolies that health insurers have enjoyed in a multitude of markets face possible breakup under a proposal made Wednesday that calls for revoking the carriers' exemption from antitrust laws.

U.S. Sen. Charles Schumer, D-N.Y., said the exemption granted to insurers under the McCarran-Ferguson Act of 1945 should be repealed in light of repeated concerns that individual insurers often have a stranglehold in major markets. The act granted exemptions to such entities as Major League Baseball and the railroads.

"The health insurance's antitrust exemption is one of the worst accidents of American history," Schumer said in a press release. "It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable. It is time to end this special status and bring true competition to the health insurance industry."

Schumer is asking that a floor amendment be attached to whatever healthcare legislation that Senate Majority Leader Harry Reid, D- Nev., brings to the floor later this month.

Calls to the industry group, America's Health Insurance Plans, were not immediately returned. There appears, however, to be some backing for reforming McCarran-Ferguson while in the process of healthcare reform.

In testimony before the Senate Judiciary Committee Wednesday, Christine Varney, assistant attorney general for the Justice Department's antitrust division, said that a commission examining how to modernize the nation's antitrust rules found that it was not necessary for insurers to be granted the exemption.
http://www.marketwatch.com/story/end-to-insurers-antitrust-exemption-proposed-2009-10-14

[Wizard777]

3. Time to end the insurance industries regulation of the federal government -

and begin the federal governments regulation of the insurance industry. I don't think the Insurance industry will be nearly as arrogant as they have been without the antitrust exemptions. That's where all the hubris has been coming from. We can devastate you. But you can't touch us. So the gloves need to come off. The fed needs to tell the insurance industry not only will we touch you. We're gonna do it bare knuckle.

[CurtEastPoint]

4. 'The states..." Do not some things belong to ALL of us regardless of ...

the state we live in? I get states rights and all that... roads, etc.... but this will perpetuate a patchwork of craziness re: insurance.

[dhpgetsit]

5. Well, duh!

Even Republicans say they want to create a competitive market for health insurance. Now is the time to end that stupid exemption.

[No Elephants]

6. Hmmmm. Are we being played ?

Aren't the Republicans the ones who wanted to do away with state regulation of insurance companies? (Yes, the alleged party of states' rights wants the big bad states to stop regulationg the beloved health insurers.)

The exemption from antitrust laws was granted as part of state regulation of insurance companies.


"The McCarran-Ferguson Act, 15 U.S.C. § 1011, is a United States federal law that allows state law to regulate the business of insurance without federal government interference. The McCarran-Ferguson Act was passed by Congress in 1945 after the Supreme Court ruled in United States v. South-Eastern Underwriters Association that insurance could be regulated by the federal government via the Commerce Clause (the overturned case stated that the federal government had this power), or, in other words, that insurance was interstate commerce.

Intent
The McCarran-Ferguson Act does not itself regulate insurance, nor does it mandate that states regulate insurance. However, it does empower Congress to pass laws in the future that will have the effect of regulating the "business of insurance." However, federal acts that do not expressly purport to regulate the "business of insurance" will not preempt state laws or regulations that regulate the "business of insurance."

The Act also provides that federal anti-trust laws will not apply to the "business of insurance" as long as the state regulates in that area, but federal anti-trust laws will apply in cases of boycott, coercion, and intimidation."

So, if you repeal McCarran-Fergusun, you subject the health insurers to antitrust laws (which are much weaker now than they were in 1945, when McCarran-Ferguson was enacted, BUT you nay also free insurers from state regulation, just as the insurers and the Republicans want.