The effort to repeal the antitrust exemption for health insurers inched another step forward today, when Sen. Patrick Leahy (D-Vt.) announced ^[1]he would file a proposed repeal as an amendment to the health care reform bill on the Senate floor.

Leahy’s amendment ^[2]would subject health and medical malpractice insurers to federal laws that forbid firms from fixing prices, rigging bids, or dividing up markets with competitors. Insurers have been exempt from such federal regulation since the 1940s McCarran-Ferguson Act.

The House bill includes ^[3]a similar provision, but allows insurers to share some data used to set rates.

The fate of Leahy’s amendment is unclear. Sen. Ben Nelson (D-Neb.), whose support Senate Democrats have assiduously courted, ^[4]has expressed displeasure with the amendment.  Majority Leader Harry Reid (D-Nev.) has signaled he would be willing to drop the amendment in exchange for Nelson’s support on the health bill.

The White House and congressional Democrats made repeal of the 1945 law a priority, after negotiations over health care reform with the insurance industry broke down.

Reid testified before a Senate Judiciary Committee hearing in October, along with Assistant Attorney General Christine Varney,  and argued that a repeal would produce more competition and better prices for consumers.

In his weekly radio address that week, President Barack Obama also attacked the exemption, complaining that the industry is “earning these profits and bonuses while enjoying a privileged exemption from our antitrust laws.”