Lipinski Helps Lead Effort to Protect Consumers from Health Insurers' Anti-Competitive Practices (October 22, 2009)

Reform Could Increase Competition in the Insurance Industry and Lead to Lower Health Care Costs

Congressman Dan Lipinski (IL-03) today joined 14 of his colleagues in the House in leading the push to add provisions to the health care reform bill that would repeal the health insurance industry's exemption from federal anti-trust laws. Eliminating this unique exemption and giving the Federal Trade Commission unambiguous authority to investigate anti-competitive practices would help to lower the cost of health insurance.

"We need to find ways to make health care more affordable for hard-working Americans," said Lipinski, who together with his colleagues signed a letter to House Speaker Nancy Pelosi about the issue. "Repealing the McCarran-Ferguson Act, which exempts the insurance industry from federal anti-trust laws, and giving the Federal Trade Commission the power to target anti-competitive behavior by insurers could help rein in skyrocketing health insurance premiums. We must do everything we can to make the health insurance market more competitive so that there is an incentive to lower costs for consumers."

The insurance industry is virtually unique in being exempt from federal anti-trust laws that protect consumers from practices such as price-fixing. But there is no compelling justification for this loophole, and estimates of the amount that consumers could save in premium costs if McCarran-Ferguson were repealed run as high as $40 billion.

Support for subjecting health insurers to federal anti-trust law is growing. On Wednesday, the House Judiciary Committee passed H.R. 3596, which would partially repeal the exemption for health insurers. Today, Speaker Pelosi said for the first time she plans to include a repeal of the exemption in health care reform legislation. But the letter to Speaker Pelosi calls for a more complete repeal of the exemption than H.R. 3596 contains, and also for specifically giving the FTC authority to go after offenders.

Over the years, numerous experts and organizations have argued for making the insurance industry subject to anti-trust rules. Last week, Assistant Attorney General Christine A. Varney of the U.S. Department of Justice Antitrust Division testified before the Senate Judiciary Committee about the many reasons to repeal McCarran-Ferguson. She pointed out that as long ago as 1977, a Justice Department study concluded the insurance industry did not need to be shielded from anti-trust rules. In 1979, The National Commission for the Review of Antitrust Laws and Procedures recommended replacing McCarran-Ferguson with much more narrowly drawn legislation. The American Bar Association has said much the same thing for two decades.

"Competition is critical for markets to work efficiently for consumers," Lipinski said. "What we have in the health insurance industry - and in many ways health care in general - is a lack of competition driving up costs."

Lipinski has also worked to lower health care costs for American families by increasing competition in other sectors of the health care industry. For example, he introduced H.R. 2566 to require hospitals to publicly disclose the prices they charge so that consumers can make informed choices, encouraging hospitals to charge lower prices. He has also called for health care reform legislation to include price transparency and quality of care information that would be available for other health care providers such as doctors and medical centers in order to increase competition in all health care sectors. Competition helps encourage better care at lower prices.

Click here to view a copy of the letter to Speaker Pelosi regarding the repeal of the McCarran-Ferguson Act.

(October 22, 2009)


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