Great explanation of McCaren/Ferguson Act that gave Ins Co anti- trust protection

[saracat]

http://desertbeacon.blogspot.com/2009/10/good-night-senator-mccarran-reid-to.html


And, now faced with the prospect of being regulated under the terms of anti-trust legislation, the insurance companies sought an exemption from those bonds, with Senators McCarran and Ferguson providing the bill: "The McCarran-Ferguson Act does not prevent the federal government from regulating the insurance industry. It provides only that states have broad authority to regulate the insurance industry unless the federal government enacts legislation specifically intended to regulate insurance and to displace state law. The McCarran-Ferguson Act also provides that the SHERMAN ANTI-TRUST ACT OF 1890, 15 U.S.C.A. § 1 et seq., the CLAYTON ACT OF 1914, 15 U.S.C.A. § 12 et seq., and the Federal Trade Commission Act of 1914, 15 U.S.C.A. §§ 41–51, apply to the business of insurance to the extent that such business is not regulated by state law." In short, states could regulate insurance companies in such areas as might be covered under the general frame of consumer protection, but when it comes to determining if an insurance company, or a coterie of insurance companies, operate in "restraint of trade," the states are powerless to prevent it and the Federal government will step aside.

What the fire insurance association was to 1944, the health insurance industry became by 2006 when the American Medical Association released the following: " Data from the American Medical Association shows that in each of 43 states, a handful of top insurers have gained such a stronghold that their markets are considered "highly concentrated" under Department of Justice guidelines, often far exceeding the thresholds that trigger antitrust concerns. The study also shows that in 166 of 294 metropolitan areas, or 56%, a single insurer controls more than half the business in health maintenance organization (HMO) and preferred provider networks (PPO) underwriting." As of the 2006 study, Blue Cross controlled approximately 90% of the market in North Dakota. The picture hasn't changed in the past three years.

Read rest at link