05.05.10

Leahy Proposes Amendment To Wall Street Reform Bill To Repeal Antitrust Exemption For Health Insurers

...Amendment Cosponsored By 21 Senators

WASHINGTON – Senator Patrick Leahy (D-Vt.) Wednesday filed an amendment to the pending Wall Street reform legislation to repeal the health insurance industry’s exemption from federal antitrust laws.  Leahy introduced legislation in September to repeal the exemption, and sought to include the repeal in the health insurance reform legislation enacted earlier this year.

“The recent economic crisis showed all of us that corporations do not act responsibly without adequate oversight,” said Leahy.  “It is important to remember that there is another industry that is not required even to play by the same rules of competition as everyone else.  Benefiting from a six-decade-old special interest exemption, the health insurance industry is not subject to the Nation’s antitrust laws.  We can surely agree that health insurers should not be allowed to collude to fix prices and allocate markets.”   

May 5, 2010, Judiciary Hrg on Violence Against Women ActThe Health Insurance Industry Antitrust Enforcement Act will overturn the long-held exemption from federal antitrust laws enjoyed by health insurers.  The House of Representatives overwhelmingly approved a companion measure earlier this year, and President Obama and the administration strongly support its enactment.  In March, Leahy and 22 Senators sent a letter to the Senate Majority urging him to set a vote on the measure.

Leahy continued, “Large corporate interests impact the daily lives of hardworking Americans and must be regulated.  When any large corporation acts irresponsibly, whether it is a financial institution or a health insurance company, Americans pay the price.  This amendment, the Health Insurance Industry Antitrust Enforcement Act will repeal the health insurers’ antitrust exemption and ensure that they follow basic rules of fair competition.  Competition ensures that consumers will pay lower prices and receive more choices.”

Leahy chairs the Senate Judiciary Committee, which held a hearing about repealing the exemption in October.  Majority Leader Harry Reid (D-Nev.) and the Assistant Attorney General for the Antitrust Division at the Department of Justice, Christine Varney, both testified at the hearing about the benefits of repealing the exemption. 

The Health Insurance Industry Antitrust Enforcement Act is supported by the Consumer Federation of America, the American Hospital Association, the American Academy of Pediatrics, and the American Dental Association.  Attorneys General from nine states sent a letter to Leahy in November indicating strong support for the measure.

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Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,
On Filing The Health Insurance Industry Antitrust Enforcement Act
As An Amendment To The Restoring American Financial Stability Act Of 2010
May 5, 2010 

Last week we began debate on Senator Dodd’s Wall Street Reform legislation.  This is the culmination of a lengthy dialogue on how best to reign in Wall Street’s excesses, and bring about a new era of corporate responsibility.  I have pushed, and will continue to push, for reform that preserves the role of the antitrust laws as a tool to keep Wall Street honest and promote competition in the financial industry.

The recent economic crisis showed all of us that corporations do not act responsibly without adequate oversight.  As we work to pass this landmark legislation, it is important to remember that, today, there is another industry that is not required to even play by the same rules of competition as everyone else.  Benefiting from a six-decade-old special interest exemption, the health insurance industry is not subject to the Nation’s antitrust laws.  We can surely agree that health insurers should not be allowed to collude to fix prices and allocate markets.   

Large corporate interests impact the daily lives of hardworking Americans and must be regulated.  When any large corporation acts irresponsibly, whether it is a financial institution or a health insurance company, Americans pay the price.  Today I filed the Health Insurance Industry Antitrust Enforcement Act as an amendment to the Wall Street Reform Bill.  This amendment, which is cosponsored by 21 other Senators, will repeal the health insurers’ antitrust exemption and ensure that they follow basic rules of fair competition.  Competition ensures that consumers will pay lower prices and receive more choices.

Congress and the President have recently enacted comprehensive health insurance reform.   It was clear from that debate, and from the Judiciary Committee’s hearing on this issue in October, that the time to repeal the health insurers’ antitrust exemption is now.  The language I am offering today passed overwhelmingly in the House, and it is supported by the President.  It has received a cross-section of support from groups such as the Consumer Federation of America, the Consumers Union, and the American Antitrust Institute.  This repeal will ensure that basic rules of fair competition apply to those reforms included in the new health insurance reform laws. 

Last fall, I introduced similar legislation to repeal the health insurers’ antitrust exemption.  The Judiciary Committee hearing I chaired examined the merits of this repeal.  The lack of affordable health insurance plagues families throughout our country, and this amendment is an important step towards ensuring that health insurers are subject to the laws of fair competition.

Today, I renew my call for the Senate to take up and pass this amendment to repeal the antitrust exemption for health insurance companies.  I hope all Senators will join me in support.

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