Democrats launch attack on insurer exemption

politico.com ^ | Oct. 14, 2009 | PATRICK O'CONNOR & CARRIE BUDOFF BROWN

[Free ThinkerNY]

The long-simmering tension between insurers and congressional Democrats is erupting into open warfare, with lawmakers stepping up their push to revoke a key federal protection for the insurance industry.

Sen. Chuck Schumer (D-N.Y.) on Wednesday called for an amendment to the health care reform bill that would remove the long-standing antitrust exemption for insurers, echoing a push by other Democrats to crack down on the industry.

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

Sen. Patrick Leahy, chairman of the Judiciary Committee, introduced a bill last month to remove the anti-trust exemption and convened a hearing Wednesday, where Schumer called for eliminating the exemption as part of the health bill working its way through Congress.

Schumer's push comes on the heels of a controversial industry-sponsored report released over the weekend that makes the case that insurance premiums will go up by as much as $4,000 per family by 2019 if the Senate Finance Committee legislation is signed into law. The release of that report by the industry group America’s Health Insurance Plans sparked angry blowback from Democrats in both chambers.

[andy58-in-nh]

I hope the insurance industry will begin to rethink the value of the enormous campaign contributions they have lavished on Congressional Democrats over the years. Somewhere along the way they forgot that bribes bind both parties, often in unforeseen ways.

[chiefqc]

These elected thieves would do better to explain why THEY are not subjecting themselves to the same deathcare that want to ram down the throats of the voters.

[marstegreg]

The more they attack, the weaker they get. They don’t seem to understand that when you are attacking those in power, you gain support (like they did when Bush was pres). When you are in power and begin to attack others you gain enemies.(like what’s happening now)

[fullchroma]

Well said.

[VeniVidiVici]

So we can we file against the government for anti-trust violations?

[ncalburt]

shummer is up fro reelection in 2010 .

i hope the insurer groups give chuckie a warning about the power of adverting .

i think gov pataki could take this fool in 2010.

[RC2]

Question here. How much money is spent on doctors and hospitals each year......by everyone? With 330 million people and if each spent $1.00 a month for insurance, that would be $330 million a month......right. Now figure if 190 million people spent $400 a month....if my math is correct (which it probably isn’t), that comes to $76 Billion a month.....that’s a month. Isn’t that $912 Billion a year? If this is all correct, where does the government get all their figures? I need someone good at math here.

[CharlesWayneCT]

Why does the insurance industry have an anti-trust exemption?

Of course, it looks like the democrats are happy to let them keep it, so long as the insurance companies supported their bill.

[agondonter]

I hope the insurance companies quickly come up with some good ads against health care like the ones they used against Hillarycare.

[Gabrial]

“Why does the insurance industry have an anti-trust exemption?”

I don't know, but I do know Congress needs anti-trust restrictions on itself. This super-majority control has broken the financial back of the US with 1.4 Trillion in new debt we have no way of paying back, and they are just warming up. It really could be game over.

[magritte]

I found this interesting...:

THE McCARRAN-FERGUSON ACT

THE ISSUE IS.Efforts to change or repeal the antitrust exemptions in the McCarran- Ferguson Act.

IT'S IMPORTANT BECAUSE.The McCarran-Ferguson Act, approved by Congress in 1945, entrusts states with the authority and responsibility for the regulation of the business of insurance. The McCarran-Ferguson Act does not include a blanket exemption from antitrust laws, but provides a targeted exemption for certain limited insurance activities. The exemption is limited to activities that constitute the "business of insurance," are "regulated by State law," and do not constitute "an agreement to boycott, coerce or intimidate or an act of boycott, coercion or intimidation." Like other exemptions from antitrust laws, this exemption is construed narrowly and has been subject to extensive court interpretation over the past 60 years.

Under the regulatory regime established by the McCarran-Ferguson Act, insurers are subject to a vibrant, comprehensive state-level system of regulation and antitrust enforcement. States regulate virtually every aspect of insurance from licensing, to market practices, to financial solvency and all insurance activity is subject to regulatory supervision. In addition, every state has an Unfair Trade Practices Act providing authority to investigate, and if appropriate, correct and punish a variety of unfair practices.

The McCarran-Ferguson Act establishes a careful and well working balance between regulation and antitrust enforcement for the state regulated insurance industry and ensures parity with other financial services industries. The existence of the narrow antitrust exemption provided by the McCarran-Ferguson Act promotes competition in the insurance marketplace by allowing companies to exchange critical data regarding losses and other factors, allows development of standardized policy language, facilitates participation and oversight of state guaranty funds, permits state control over liquidations and enables the development and operation of assigned risk plans.

The existence of the McCarran-Ferguson limited antitrust exemption serves to make the industry more competitive, not less. Repeal or limitation of the McCarran-Ferguson limited exemption would reduce competition, increase insurance costs and reduce availability for some high-risk coverages. Specifically, changes could imperil the ability of insurers to exchange critical data endangering market participation by smaller insurers and making it more difficult for carriers to enter new markets. Threats to standardization of policy language would make it more difficult for consumers to compare policies and prices and barriers to operation of assigned risk plans and guaranty funds would undermine the functioning of insurance markets.

The McCarran-Ferguson Act has worked well for decades to maintain a vigorous and competitive marketplace for America's consumers and should be preserved.

Last year, Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., Ranking Member Arlen Specter, R-Penn., Majority Leader Harry Reid, D-Nev., Minority Leader Trent Lott, R-Miss., and Sen. Mary Landrieu, D-La., introduced S. 618, the Insurance Industry Competition Act of 2007. The legislation would amend the 62-year McCarran-Ferguson Act to permit the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to enforce federal antitrust laws and regulations. The legislation would leave it to the discretion of the FTC and the DOJ whether to issue joint statements of their antitrust enforcement policies regarding joint activities in the business of insurance, replacing more than a half century of the creation and interpretation of such policies by the states.

Identical legislation (H.R. 1081) was introduced in the House of Representatives by Representatives Peter DeFazio, D-Ore., Gene Taylor, D-Miss., Bobby Jindal, R-La., Charlie Melancon, D-La., Rodney Alexander, R-La. and Walter B. Jones, R-N.C.

Since we first sounded the alarm to save the McCarran-Ferguson Act more than a year ago, NAMIC members have embraced the fight and reached out to decision makers at every level. Through the Congressional Contact Program, to date, over 330 NAMIC members from 35 states have met with their elected officials and delivered a forceful message on the potential damage of repeal of McCarran-Ferguson to the industry and consumers.

NAMIC POSITION.NAMIC opposes any changes to or repeal of the existing antitrust exemptions afforded under the McCarran-Ferguson Act. The Congress should be wary of the unintended consequences of changes to the current limited antitrust exemption. Any change that precludes, restricts or even merely discourages the production and exchange of advisory loss costs and supplementary rating information could place smaller and regional firms at a distinct disadvantage, increase consumer costs, reduce consumer choice and seriously undermine competition. There is no credible evidence that the cost, availability or quality of insurance products would be enhanced if the McCarran-Ferguson limited antitrust exemptions were repealed or modified. Any change in the existing antitrust regime and repeal or modification to the current limitations could decrease market stability, reduce affordability and availability of products, stifle innovation and expansion, diminish industry efficiency and ultimately, inhibit rather than increase competition in the insurance marketplace.

1 McCarran-Ferguson Act, 15 USC 1011, et seq., 1945.
2 The Sherman Act (prohibits restraint of trade and monopolistic practices), the Clayton Act (prohibits anti-competitive practices), the Robinson-Patman Act (an amendment to the Clayton Act prohibits price discrimination among customers who compete against each other), and the Federal Trade Commission Act (prohibits unfair methods of competition and deceptive practices)

http://www.namic.org/fedkey/08mccarran.asp

[Bender2]

BUMP for later read

[marstegreg]

I hope they are ready for a fight. The White House seems to sharpening their sabres. They have already verbally sent out the message for the insurance companies to cease and dessist. I hope they are brave enough.

[Sun]

My automtic email from Schumer:

“Thank you for your letter opposing the health care reform that lacks a ban on federal funding for abortion.

As the father of two daughters, I share your deep respect for the sanctity of life and realize the importance of honoring one?s moral and religious heritage. I also value the freedom of all American citizens to base their personal choices on their own values and moral convictions. I also support measures that aim to reduce the number of abortions, and I believe that education and prevention are critical to achieving that.

The decision to have an abortion will never be an easy one, nor should it be. While I believe that every woman should have the right to make her own decision, in counsel with her physician, family, and religious adviser, I also believe that funding programs that aim to reduce the number of unwanted pregnancies is essential.

Thank you for contacting me on this important issue. Please do not hesitate to contact me in the future if I can ever be of assistance to you on this or any other matter.

Sincerely,

Charles E. Schumer
United States Senator”

It doesn’t say our tax dollars won’t cover abortion, does it?