President Obama Backs Repealing Health Insurance Industry Antitrust Exemption
EmailPresident Obama today announced he’s supporting the move in Congress to repeal the antitrust exemption currently enjoyed by health insurers.
“At its core, health reform is all about ensuring that American families and businesses have more choices, benefit from more competition, and have greater control over their own health care,” White House press secretary Robert Gibbs said today. “Repealing this exemption is an important part of that effort.”
The McCarran-Ferguson Act of 1945 reaffirmed that states are the primary regulators of insurance, and it gave the “business of insurance” an exemption from antitrust laws. Insurance industry experts say this mainly had to do with independent entities called rate bureaus compiling information from insurance companies.
Gibbs said that “there are no rules outlawing bid rigging, price fixing, and other insurance company practices that will drive up health care costs, and often drive up their own profits as well.”
Karen Ignagni, president and CEO of America's Health Insurance Plans (AHIP), the largest insurance company lobbying group, said in a statement that “a wide range of insurer activities, including mergers and many types of business practices, are and always have been subject to federal antitrust laws and to enforcement by the Department of Justice.” She said the repeal “could create legal uncertainty that could disrupt important initiatives to improve patient care, such as aggregating quality data to empower patients with better information, or administrative simplification reforms to enhance efficiency.”
The Congressional Budget Office last year studied the issue and concluded repealing the exemption “would have no significant cost to the federal government. Enacting the bill could affect direct spending and revenues, but any such effects would not be significant.”
To the extent that “insurers would otherwise engage in the prohibited practices and be prevented from doing so by enactment of this bill, premiums might be lower,” the CBO study stated, noting that the “effect is likely to be small because state laws already bar the activities that would be prohibited under federal law if this bill was enacted.” CBO concluded that “enacting the legislation would have no significant effect on the premiums that private insurers would charge for health insurance.”
One health insurance industry official said the exemption really had very little to do with health insurance, and the announcement seemed more political than anything else.
-jpt
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“One health insurance industry official said the exemption really had very little to do with health insurance, and the announcement seemed more political than anything else.”
Ha…what’s new?!
Posted by: wow | February 23, 2010, 5:35 pm 5:35 pm
He needs to do more than “back” it. He needs to demand its repeal, and he needs to railroad the Dems in Congress, until they do repeal it.
No corporation should have carte blanche in how it operates, and no industry, either.
That is why global corporations have become bad world citizens, and especially bad US citizens.
Posted by: Rick McDaniel | February 23, 2010, 5:43 pm 5:43 pm
Obama…keep at those insurance companies ….they are making hugh profits even in a recession and still have an exemption….should not be.
Posted by: talmag | February 23, 2010, 6:39 pm 6:39 pm
time to start taxing churches and the like for their playing footsie in the political world..
Posted by: XXX | February 23, 2010, 7:10 pm 7:10 pm
It’s about time.
Doesn’t anyone see that the insurance industry and Republican Party leaders essentially are one and the same?
Government by and for the people, not the corporate elite!
Posted by: bob | February 23, 2010, 7:40 pm 7:40 pm
The White House got a major gift from Anthem in the form of their atrocious decision to raise premiums for the precise reason the president has pushed so hard for health care reform. THey need to make this about the insurance industry rather and the consequences of inaction on the middle-class rather than covering more folks.
Posted by: matt | February 23, 2010, 7:59 pm 7:59 pm
You would spark a ton of new companies and real competition, if you repeal their anti-trust exemption and allow for the purchase of insurance across state lines.
Posted by: Jose | February 23, 2010, 8:41 pm 8:41 pm
” allow for the purchase of insurance across state lines.”
Stop parroting the damn AHIP propaganda.
We all know that there is currently no prohibition against insurance being sold across state lines.
It just does not exist – it is a myth.
Posted by: Flash Override | February 23, 2010, 8:57 pm 8:57 pm
I live in NJ and buy my health insurance from CT. Am I breaking the law? no.
Posted by: Flash Override | February 23, 2010, 9:02 pm 9:02 pm
They should open up medicare to employers and individuals. Physicians and hospitals are already familiar with it. Their fees are already negotiated. This will also help medicare because people will be buying into it so you don’t have to cut benefits. Medicare will provide competition and decrease premium from private insurance. We don’t have to reinvent the wheel. We just need to reform it. Pls pass this along to everyone.
Posted by: hybridhealthcare | February 23, 2010, 9:36 pm 9:36 pm
FlashOverdrive – State laws prohibit the purchase of insurance across state lines. It is designed to protect insurance company jobs in high mandate states (i.e. states that mandate that insurance companies cover things like acupuncture). For instance, I lived in Minnesota, where they had a law that denied me the right to buy health insurance from another state. When I moved to Minnesota and established residency, my health insurer informed me that they were required by law to transfer my policy to Minnesota. I had to switch insurers, because the same insurer in Minnesota was not the least expensive option (for the same level of coverage).
Posted by: Jose | February 23, 2010, 9:36 pm 9:36 pm
Jose, you are at least more honest. What you want is not the ability to sell insurance across state lines, but the ability to destroy all but the most insurance friendly state regulations.
People taking that position shouldn’t pretend that they want the ability to buy insurance across state lines – they already have that.
Posted by: Flash Override | February 23, 2010, 10:04 pm 10:04 pm
Flash – I’d be more concerned with the fact that you were wrong on this issue and fixing your potentially illegal activity (buying insurance from a less-regulated state, CT, thereby avoiding the purchase of insurance in a more regulated state, NJ); than arguing the finer details here.
Posted by: Jose | February 23, 2010, 10:17 pm 10:17 pm
Bill Ritter doesn’t look like a Black Plowman to me.
Posted by: Nephron | February 23, 2010, 11:17 pm 11:17 pm
The Obama/Pelosi/Reid administration has no problem governing AGAINST the will of the people. WE DON’T WANT GOVERNMENT-RUN HEALTH CARE. I resent what this party’s leadership has been doing since 2006 when they took control of Congress. They’ve lied about most everything. They’ve looked down upon the American people with such arrogant conceit and even have gone so far as to dismiss those who have spoken out against their policies.
Posted by: This Corrupt Administration Will Destroy America! | February 23, 2010, 11:38 pm 11:38 pm
The Obama Administration is putting the screws to Americans. Nancy and Obama — what a pair. They remind me of two small children who want their way no matter what anyone else wants. Americans do not like it when the government acts like a bully — the good news is that we can just vote them all out of office if they push the broken, ineffective, government-run health care bill down our throats. Now that is really good news — vote them all out!
Posted by: THINK ABOUT IT | February 24, 2010, 12:08 am 12:08 am
The feds need to get out of the health insurance business and let the states handle it.
The exemption that needs to be repealed is the one that ‘self insured’ plans have that allows them to skirt consumer protections afforded by state law.
Posted by: Joe White | February 24, 2010, 12:08 am 12:08 am
Posted by: This Corrupt Administration Will Destroy America! | Feb 23, 2010 11:38:21 PM
Your name says it all – part of the arrogant Republican right who think only they have the divine right to rule America – and that everyone else will destroy it.
Hogwash. We saw what the Republicans did under Bush and Cheney.
Posted by: tierra | February 24, 2010, 12:31 am 12:31 am
Jose, you seem like an intelligent person. Therefore, I must assume that your are knowingly misrepresenting the facts. The insurance policy that I buy from an insurer in another state is required to comply with the insurance laws in the state I reside. Its that simple. The laws do not prohibit the sale of insurance across state lines, they require insurance companies to comply with state laws.
Posted by: Flash Override | February 24, 2010, 8:17 am 8:17 am
“The Obama/Pelosi/Reid administration has no problem governing AGAINST the will of the people. WE DON’T WANT GOVERNMENT-RUN HEALTH CARE”
======================================
Au contraire.
Polls indicate widespread approval of the idea of a government run health plan.
If government run health care is good enough for Sarah Palin, why can’t I have it?
Posted by: Flash Override | February 24, 2010, 8:24 am 8:24 am
this COULD be a very bad move. It could go either way. At some level I like having more of a chance to regulate insurance companies. At a State level an individual has more chance to regulate and oversee insurance companies (because State courts, State Reps, and your vote matter more.) At a Federal level a person’s vote is almost meaningless and what chance would the Feds intervene if an insurance company was simply screwing over one state or person? And would any suits be more expensive and hard since it would be in Federal Court?
Posted by: Ed | February 24, 2010, 11:38 am 11:38 am
“The laws do not prohibit the sale of insurance across state lines, they require insurance companies to comply with state laws.”
Which insurance companies don’t like at all.
They rather sell from the state with the least consumer protections and rip people off all nice and legal.
Posted by: Ryan C | February 24, 2010, 12:35 pm 12:35 pm
The greed of the health insurance companies knows no bounds.
Can you imagine the increased cost to your doctor or hospital if we did buy health insurance across state lines? As it stands my doctor has to employ two people to keep up with claims.
I don’t know why anyone can’t understand that expanding Medicare coverage, (that those patients pay for) to those age 50 and up (who are priced out of the private insurance market) and those too poor for private insurance, would be terrific for our economy.
It would let lots of folks retire, opening up jobs for younger people. I know lots of people who can afford to retire but can’t afford health insurance if they do so, as they are too young for Medicare.
It would create a lot of jobs in the medical industry as those who lacked insurance get needed treatments.
It would save lives, as lacking insurance is a deadly deal. 45,000 Americans die every year because they don’t have insurance. The delay to seek treatment because you can’t afford a big bill, kills people.
Health insurance reform will be good for our economy, as well as the currently uninsured. And being uninsured can happen to any of us if we lose our jobs. When you think of the uninsured, remember the saying, ‘there but for the grace of God, go I.’
Posted by: Lydia | February 24, 2010, 1:31 pm 1:31 pm
WE DON’T WANT GOVERNMENT-RUN HEALTH CARE.
This Corrupt..
fortunately your version of ‘we’ is the substantial minority,.. and it’s not ‘gov. run healthcare’, you can say that ’till your blue in the face, but that won’t make it true.
Republicans have revealed themselves:
- get rid of social security, or privatize it..
- get rid of medicare/medicade
- take away legal protections from citizens
the fringe ‘right’ has shown themselves to be xenophobic paranoids, white supremacist/nazi loving group, who are about as uneducated about the constitution as one could imagine.
Posted by: XXX | February 24, 2010, 2:03 pm 2:03 pm
Yeah right. Just like he backed the Public Option?
Give me a break.
No, actually just give me a PUBLIC OPTION.
Posted by: Hondoro | February 24, 2010, 2:37 pm 2:37 pm
They should repeal the McCarran-Ferguson Act and also give consumers the right to purchase insurance across state lines.
If repealing the antitrust exemption has little effect with increasing competition, then allowing customers to purchase plans across state lines will increase competition and will reduce insurance premiums.
The cost saving will not come from lower benefits, but from reduced administrative cost associated with doing business in each states complex healthcare system.
1500+ insurance companies X 50 states = a lot of redundant costs that can be substantially cut.
Posted by: NorthMan | February 24, 2010, 5:07 pm 5:07 pm
Here’s an idea…why NOT let the American people working to support their families and communities keep more of their money and plan their own retirement. I can’t believe people think government is better able to save for your retirement! They are taking over a huge part of our economny and I beg to differ that the MAJORITY of Americans DO NOT WANT THE FEDERAL GOVERNMENT running their lives and snatching 25-50% of their hard earned dollars. We shall see what transpires in the coming months and year. Make no mistake…the majority will take this country back. This attitude of self-entitlement has to stop…people need to go back to work. and healthcare???? Why is it that Canadians flock to the states for medical procedures???? Unversal healthcare is working out really well over there…foreget it!
Posted by: LInda | March 3, 2010, 8:59 am 8:59 am