House to Vote on Health Insurance Antitrust Bill Next Week
By Aruna Viswanatha | February 17, 2010 12:38 pm

A bill that would subject health insurers to federal antitrust laws is slated to come up for a vote in the House next week, but it will likely be narrower than similar provisions included in the massive health overhaul package that passed the House in November.

The new bill, to be introduced by Reps. Tom Perriello (D-Va.), and Betsy Markey (D-Colo.), would give the Federal Trade Commission the authority to investigate those activities in the insurance industry that amount to “unfair methods of competition,” a House aide told Main Justice. But the bill would not give the FTC any additional authority to study the insurance industry, the aide said, which is a provision that was included in the original legislation.

Next week’s bill would repeal in part the McCarran-Ferguson Act, a 1945 law that exempts the insurance industry from some federal antitrust scrutiny and turns that responsibility over to the states. The bill has been pitched as the first installment of House Speaker Nancy Pelosi’s strategy to pass health care legislation through piecemeal measures.

The yet-to-be introduced bill had been scheduled for floor action last week, but the House schedule was curtailed because of winter storms in Washington, D.C.

When legislators first considered repealing the antitrust exemption last fall, according to FTC officials, the agency pushed for the study provision and argued that removing the antitrust exemption would not change much. “We’ve been restricted, not so much because of McCarran but because of this study provision,” an FTC official told Main Justice at the time.

The Congressional Budget Office said in October that a repeal of McCarran-Ferguson  ”would have no significant effects” on prices that health insurers charge for premiums.  Mergers between insurance companies still have to pass federal antitrust scrutiny,  and the industry is subject to regulation at the state level.

Historically the Justice Department has taken the lead on investigating the insurance industry. Both agencies enforce federal antitrust regulation, and divide the work largely based on which agency has cultivated expertise in the related industry.

The FTC both enforces competition laws and conducts studies of industries that are used to shape policy.

The limits on the FTC’s ability to study the insurance industry date back three decades when the agency was engaged in studies that were not popular on Capitol Hill. In the past, FTC studies have resulted in enforcement actions, particularly in the pharmaceutical sector.

Politico reported yesterday that lawmakers were having trouble keeping even the limited bill intact. The original repeal was written to apply to both health and medical malpractice insurers, but property and casualty insurers pushed for medical malpractice insurance to be removed from the bill. The exemption was originally granted to allow insurance firms to share data used to estimate losses and set rates, which is a process used more often by medical liability insurers.

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One Comment

  1. [...] be a smart move to pass this as a stand-alone, as the House is planning to do this week with the anti-trust repeal legislation, apart from the full [...]

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