Health Antitrust Proposal To Reach Senate Floor

WASHINGTON BUREAU -- McCarran-Ferguson Act health antitrust proposals have been making waves in Congress today.

Members of the House Judiciary Committee voted 20-9 to approve H.R. 3596, a bill that would repeal the McCarran-Ferguson antitrust exemption both for health insurers and for medical malpractice insurers. Supporters persuaded 3 Republicans to vote for the bill.

Observers believe House leaders will add H.R. 3596 to the version of H.R. 3200 that will be debated on the House floor. A health bill could reach the House floor in early November.

Over in the Senate, leaders said they would let advocates of antitrust exemption repeal offer a repeal amendment when the Senate is debating S. 1796, the America's Healthy Future Act bill, on the Senate floor. Senate leaders could get their health bill to the floor as early as next week.

First, Senate leaders must meld S. 1796, the Senate Finance Committee's health bill, with a health bill passed in July by the Senate Health, Education, Labor and Pensions Committee.

The Senate Judiciary Committee recently held a hearing on a stand-alone antitrust exemption repeal bill, S. 1681, the Senate version of H.R. 3596. Senate Majority Leader Harry Reid expressed strong support for the Health Insurance Industry Antitrust Enforcement Act bill, saying, "It is time to pass this legislation and pass it now."

Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., who introduced S. 1681, has welcomed the news that an antitrust repeal amendment will be declared "in order" during floor debate on the Senate health bill.

"The American people deserve reform that serves their needs, not the special interests of insurance companies," Leahy says in a statement. "Ending this cozy exemption is another way to strengthen consumer choice through a competitive marketplace."

"The health insurance industry's antitrust exemption is sort of an accident of American history," says Sen. Charles Schumer, D-N.Y. "Today, with the health insurance industry one of the most highly concentrated in our entire economy, it is obsolete. We can't pass effective health care reform if we don't hold health insurance companies to the same standards as other American industries."

President Obama said Saturday during a radio address that Congress is "rightfully reviewing" health insurance industry antitrust laws.

Ira Loss, an analyst at Washington Analysis, Washington, says the Senate is unlikely to approve the antitrust repeal amendment.

America's Health Insurance Plans, Washington, has responded to the announcement by releasing a copy of a letter it sent to Rep. John Conyers Jr., D-Mich., the chairman of the House Judiciary Committee and the primary sponsor of H.R. 3596.

"The bills under consideration may be based on a misperception of the scope and impact of the McCarran-Ferguson Act on health insurers," AHIP President Karen Ignagni writes in the letter.

An additional concern is the increased regulatory and legal uncertainty that would result from repeal, Ignagni writes.

"The McCarran-Ferguson Act entrusted states with the responsibility for the comprehensive regulation of the business of insurance," she writes. "States have met this responsibility by regulating health insurance in every area... Injecting a second regulatory scheme holds the potential to undermine the current regulatory structure by creating potential federal antitrust consequences outside of the states' oversight framework."

Lawrence Smarr, president of the Physician Insurers Association of America, Rockville, Md., says the announcement that an antitrust amendment will come up on the Senate floor is not a surprise.

"We expected this, but are still going to try to get our line of business removed from the bill," Smarr says. "Our main concern remains the vagueness of the language of the bill, and how it will be interpreted after being enactment into law. Our fear is that it will be the stimulus of a lot of lawsuits against medical malpractice insurers over the use of industry data."

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