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Time to Strip Health Insurers of Antitrust Exemption!

Time to Strip Health Insurers of Antitrust Exemption!

Should the health insurance industry be exempt from the same anti-trust laws that apply to other industries? Should they be allowed to create monopolies in individual markets and set prices with little or no competition? 

The truth is, they have enjoyed this perk since 1946, but Senate Democrats are pushing back against the powerful insurance lobby.

This past Wednesday, U.S. Senator Charles E. Schumer (D-NY) suggested that pending health care legislation should include a new provision to revoke the health insurance industry’s anti-trust exemption.

Under the McCaran-Ferguson Anti-trust Act of 1946, health insurance companies — unlike other industries — are exempt from federal anti-trust laws on the grounds that it does not engage in interstate commerce.

“The health insurance’s antitrust exemption is one of the worst accidents of American history. 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 said.

Last week, the group America’s Health Insurance Plans released a report warning that insurance premiums under the Baucus plan will rise by 111 percent over the next decade, but only by 79 percent without the reform bill. It came out sounding like a threat and, indeed, made the case for a public option even stronger.

The White House and Democrats have since accused AHIP of providing misleading information and cherry-picking parts of the bill to produce their report.

According to the Justice Department, in 39 states, only 2 firms control more than 50 percent of the market. These monopolies and near-monopolies allow insurers to set their rates wherever they please. A repeal of the McCarran-Ferguson Act would encourage greater competition and break the stranglehold some insurers have in individual markets, reducing costs for consumers.

For those who really believe in competition and the free market, repeal of the McCarran-Ferguson Act should be welcome. Why on earth should the health insurance industry be exempt from the same antitrust laws as other industries? 

The health insurance industry has come out fighting and some members of Congress appear ready to fight back. Both the House and the Senate have bills on this issue pending.

Addressing a repeal of the McCarran-Ferguson Act, Americans United for Change released this new television ad airing on cable stations in Washington, D.C.

Do you agree with the Democrats who want to repeal the McCarran-Ferguson Act… or do you believe health insurers should continue to enjoy this perk… please answer the poll and give your reasons in the comment section below.

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12:10PM PDT on Oct 18, 2009

While we're at it, why don't we increse taxes to cover the $4700 per person our national debt for this year's budget is going to cost and go to a pay as you go type of budget system as the state of Indiana has. This would solve the problem of having to sell an increasing number of Treasury Bonds to The people's Republic of China and having to continually increase imports from them to cover the interest on the bonds. Eventually we will wake up and realize that we have sold ALL of our jobs in the US to them thru our deficit spending practices. How hypocritical are we?

7:52PM PDT on Oct 17, 2009

At it's beginning, the insurence companies were small and truely helpful. But they got too big, became way over focused on profits and are now imploding.We need to phase them out and not try to regulate them. That will take more time and money [taxes] than it's probably worth. Let's just fast foreward to single payer health care and hire a pannel of health care providers to decide what general services should cost. That would be a start. Everybody would be covered for the basics, Then we can observe and learn what will work best, for consummers and providers when it comes to more high tech procedures.Free market principles can't work if the consummers don't know the costs of things.And knowing the cost of things, they need to take responsibility for how much of the healthcare pie they really need or want, instead of just taking as much as is offered because the government provides it.

10:06PM PDT on Oct 16, 2009

Does this mean that 'We The People' are taking back our country from the greedy big business companies? Yahoo! it's about time.
Let's make them a 'Now, in a NEW..., SMALLER...., more CONVENIENT size'. That has been the selling point of industry since the recession hit. Let's take the mega size out of the BIG insurance companies, in other words, break up the monopoly by removing the protections.
Maybe they became so huge and out of control when industry was trying to sell us on the 'BIGGER is BETTER' garbage, but that is now out of date.

12:42PM PDT on Oct 16, 2009

The insurance companies are getting away with lobbying Congress for their own greed. This is legal bribery that is succeeding. Some one must come forward from the Congress to address outlawing Lobbying. As most of Congress benefits from the Lobbyists such as the Insurance Companies who are spending billions to defeat a Public Option, I guess this will not be.

9:54AM PDT on Oct 16, 2009

The bottom line is greed as usual. Insurance companies and pharmaceutical companies are the biggest offenders in the rising cost of health care. My son just married an Aussie gal, she's a nurse. They are not allowed to advertise drugs in Australia. They have health care for all. In this country, if you're depressed, pop a pill. Never mind trying to find out why you're depressed. If you are insured by one of the insurance companies that seem to be in the business of doing their best to not pay, good luck. When it comes time to vote, make an effort to find out how your representatives voted on health care, and on repealing the McCaran-Ferguson act. People need to become INFORMED voters, not just party line voters.

9:37AM PDT on Oct 16, 2009

United Health (?) came to town and swalloed up ALL the other health insurers so that we now have no choice!This is certainly a rotten monoply and it wasn't good before they came here but,no it is impossible since there is no other afforable choice !

9:35AM PDT on Oct 16, 2009

In fact health insurance IS now an interstate commerce industry so the exemption has no rationale. Conservatives push allowing buying "across state lines" - making current state regulation obsolete and lobbyists important only in DC. Perhaps this would be a good trade-off: sell across state lines, but no anti-trust protections. Would need to be closely monitored.

9:10AM PDT on Oct 16, 2009

This very thing has caused the Health Crisis we find ourselves in. That is the very reason we had AntiTrust Laws to begin with.

8:49AM PDT on Oct 16, 2009

This is the single-most problem with healthcare today. Forget about all the other issues with health care reform. Elimanateing this loop-hole will have more impact than anything else. If congress took this step, it might be easier to find common ground on the rest. And if your congressperson doesn't vote to elimanate this loop-hole, I would suspect them for being in the insurence company's pocket.

7:56AM PDT on Oct 16, 2009

It's high time protections were removed from this sacred cow (medical insurance). If we are going to have a free market economy, it is time to free the market.

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