The House health care bill unveiled today would give the Federal Trade Commission new authority to investigate anti-competitive behavior in the insurance industry.
It’s the latest in a series of measures against insurers from congressional Democrats to subject health insurers to greater federal oversight.
On page 149 of the nearly 2,000-page bill, lawmakers propose giving the FTC the ability to “prepare reports” and “conduct studies” on the business of insurance without a request to do so from Congress.
FTC Chairman Jon Leibowitz said in a statement he was “pleased” with the provisions, which he said would “remove an anachronistic antitrust exemption and ensure that consumers are protected from anticompetitive behavior.”
The FTC has long examined pharmaceuticals, healthcare and other industries. But it has been barred from investigating certain parts of the insurance industry without a request from Congress for almost three decades.
The FTC both enforces competition laws and conducts studies of industries that are used to shape policy. Recent FTC reports have been cited at congressional hearings and in court opinions.
“These studies do carry significant weight,” said Mike Cowie, a former FTC director and current antitrust partner at Howrey in D.C. who represents a pharmaceutical firm that is a subject in an FTC study on the pricing of generic drugs.
The new authority would allow the FTC to gather data and documents from insurers in a lesser version of subpoena power, Cowie says.
Also in the House bill is a partial repeal of a 1940s law that exempts insurers from federal antitrust regulations. That provision would allow both the Justice Department and the Federal Trade Commission to investigate and punish antitrust violations in the health insurance industry.
The FTC and the Justice Department have overlapping authority in enforcing competition rules, and divide cases between them based on industry and expertise. The insurance industry has been the domain of the Justice Department, since the FTC has been barred from devoting resources to insurance investigations.
When the FTC issued a report on the health care industry a few years ago, for example, it was able to include information on health insurance only because the Justice Department was a co-sponsor of the study.
But even though insurance is generally an industry covered by the Justice Department, the new authority could lead to further action by the FTC.
If the agency discovers conduct on its own, there’s a good chance it would see the case through, said Kenneth Glazer, a former deputy director at the FTC and current antitrust partner at K&L Gates. “If an agency takes the initiative,” he said, it’s not inconceivable that they could do it.”