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McCarran in the Crosshairs of the Healthcare Reform Debate

As we reported several weeks ago, the repeal of the limited antitrust exemption for insurers in the McCarran-Ferguson Act has emerged as an issue again – this time in the debate over healthcare reform. Although in this case, the repeal only includes health and medical malpractice insurers, NAMIC responded immediately to the recycled rhetoric of the 2007 effort to attack McCarran and sent a joint letter with others from the industry. Today however, the House Judiciary Committee, by a 20-9 vote, approved H.R. 3596, the Health Insurance Industry Antitrust Enforcement Act of 2009, which would repeal the long-standing antitrust provisions with respect to health and medical malpractice insurance issuers.

As this issue has developed, NAMIC has been aggressively educating key members of the House Judiciary Committee. Our efforts have generated support for this issue – in opening remarks, Ranking Member Lamar Smith, R-Texas, informed the committee that the McCarran-Ferguson Act has promoted competition of insurance companies over the years and that by repealing the limited antitrust exemption this bill would threaten the viability of small and medium size insurers. Additionally, Rep. Daniel E. Lungren, R-Calif., offered an amendment which would exempt the collection and sharing of historical loss data and determining loss development factors from federal antitrust law. The performance of actuarial services which do not result in a restraint of trade would likewise be exempted. This amendment was adopted by a voice vote.

On the other side of Capitol Hill, Senate Majority Leader Harry Reid, D-Nev., along with Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and Sen. Charles Schumer, D-N.Y., held a press conference announcing that they also plan to eliminate the limited antitrust exemption for health and medical malpractice insurance issuers. In his prepared remarks, Reid said “Providing antitrust exemptions for insurance companies has been anticompetitive and damaging to the American family and the American economy.”

This push is based on the mistaken belief that repealing the antitrust exemption for health insurers would significantly increase competition, make coverage less expensive, and more available. In fact, it will have the opposite effect.

Leadership in both the House and the Senate aim to include this legislation in their healthcare reform bills. NAMIC will remain on top of this issue and will keep you apprised of the latest developments as we work to ensure the preservation of the McCarran-Ferguson Act.

Posted: Wednesday, October 21, 2009 12:00:00 AM. Modified: Wednesday, October 21, 2009 3:51:04 PM.

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