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The effort to strip antitrust exemption from health insurers was not included in the final health care reform legislation, as it had been in the original reform bill in the U.S. House of Representatives. Even though it may not have been part of the massive reform package, this proposed reversal of part of the 1945 McCarran-Ferguson Act is still pending as a stand-alone bill in the Senate.

“We appreciate that Congress recognized repealing McCarran-Ferguson would not provide any benefits to the consumer or the insurance marketplace,” said David A. Sampson, president and chief executive officer of the Property Casualty Insurers Association of America, in a statement.

Though Sampson is interpreting this development as a retreat by lawmakers who support the removal, it’s unclear that members of Congress see it that way. A brief stand-alone bill that would take away the exemption from health insurers already passed the House (BestWire, Feb. 24, 2010). A spokeswoman for Sen. Patrick Leahy, the chairman of the Judiciary Committee who authored a similar bill in the Senate, told BestWire he hasn’t backed down from an attempt to pass this legislation on the Senate side, after which President Barack Obama could sign it into law. And a spokeswoman for one of the House bill’s sponsors, Rep. Tom Perriello, D-Va., said he has been “encouraged” by the efforts of Leahy and other proponents in the Senate.

Insurers have opposed this idea from the time it was first proposed in the health care debate last year, although at that point the proposed legislation also lumped medical liability insurers in with health insurers. Those opposing the antitrust bill have said it tries to fix a problem that doesn’t exist.

“The McCarran-Ferguson Act delegates insurance regulation and most enforcement of antitrust laws to the states,” Sampson said. “Every state already has a comprehensive insurance code that governs the insurance industry, including subjecting the industry to strict antitrust enforcement.”

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said in February the bill that passed the House was “politics as usual. Rather than address the rapid increase in the cost of medical care, there has been an effort in Washington to shift the focus to the insurance industry. The fact is that McCarran-Ferguson has nothing to do with competition within health insurance” (BestWire, Feb. 22, 2010).

The nonpartisan Congressional Budget Office has predicted — based on earlier versions of the legislation — there would be no major effect on premium levels from a partial repeal of the antitrust exemption. Another recent report from the Congressional Research Service, also based on previous versions of the legislation, said, “Many of the cooperative activities that insurers engage in … might nevertheless be found to be permissible under the ‘state action’ doctrine” (BestWire, Feb. 11, 2010).

(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com) March 24, 2010

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