U.S. House Representatives Peter DeFazio, (D-OR) and Gene Taylor (D-MS) drafted a letter to House Speaker Nancy Pelosi (D-CA) in support of repealing the antitrust exemption under the McCarran Ferguson Act for health insurers and medical liability insurers. As previously discussed here, Representatives DeFazio and Taylor co-sponsored legislation introduced earlier this year to repeal the exemption from the federal antitrust laws and give the Department of Justice and the Federal Trade Commission the authority to apply federal antitrust laws to the purported anticompetitive behavior in the insurance industry. A similar repeal was included in the House’s version of the healthcare reform legislation (H.R.3962), and although initially introduced into the Senate version (H.R. 3590) by Senator Patrick Leahy (D-VT), it was eventually removed as a concession to Senator Ben Nelson (D-NE).
Proponents of the repeal state that in light of the House leadership’s concession on the public option (a government run health insurer alternative to private insurance), the repeal of the McCarran Ferguson Act’s antitrust exemption is a cost-cutting measure the House leadership should insist upon. Such alleged savings would come from the policing of competition, which would prevent the purported collusion among insurers. The letter also points to a recent public opinion poll that showed a majority of Americans believe “health insurance companies [should] play by the same rules as every other company in America.”
Opponents of repealing the antitrust exemption are very concerned with what they consider to be lawmakers’ apparent lack of understanding about the purpose of McCarran Ferguson Act and the nature of the insurance industry. According to media reports, Marliss McManus, a senior federal affairs director for the National Association of Mutual Insurance Companies, stated that the limited antitrust exemption under the McCarran-Ferguson Act allows insurers to share data in order to more accurately determine the risks they are underwriting and properly set their prices.