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.