12.01.09

Leahy To File Antitrust Repeal Amendment Today

WASHINGTON (Tuesday, Dec. 1, 2009) – Senator Patrick Leahy (D-Vt.) Tuesday announced that he will file an amendment to the Patient Protection and Affordable Care Act that will repeal the health insurance and medical malpractice insurance industries’ exemption from federal antitrust laws.
 
Leahy introduced the Health Insurance Industry Antitrust Enforcement Act in September.  Leahy chairs the Senate Judiciary Committee, which held a hearing about the legislation in October.  The bill is cosponsored by 18 senators, including Senate Majority Leader Harry Reid (D-Nev.), who testified before the Judiciary Committee.
 
Leahy said, “This amendment will prohibit the most egregious anticompetitive conduct – price fixing, bid rigging and market allocations – conduct that harms consumers, raises health care costs, and for which there is no justification.  Subjecting health and medical malpractice insurance providers to the antitrust laws will enable customers to feel confident that the price they are being quoted is the product of a fair marketplace.”
 
Health reform legislation passed by the House of Representatives includes a provision similar to the Health Insurance Industry Antitrust Enforcement Act, and the President has indicated support for congressional efforts to determine whether any justification remains for permitting price fixing.  Since 1945, health insurers and medical malpractice insurers have been exempt from federal antitrust laws, which are designed to encourage competition and protect consumers.
 
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 10 states sent a letter to Leahy in November indicating strong support for the measure.
 
“The lack of affordable health insurance plagues families throughout our country, and this amendment is a first step towards ensuring that health insurers and medical malpractice insurers are subject to fair competition,” Leahy said.  
 
The Health Insurance Industry Antitrust Enforcement Act (S. 1681) is also cosponsored by Senators Maria Cantwell (D-Wash.), Richard Durbin (D-Ill.), Russ Feingold (D-Wis.), Dianne Feinstein (D-Calif.), Chuck Schumer (D-N.Y.), Arlen Specter (D-Pa.), Claire McCaskill (D-Mo.), Ron Wyden (D-Ore.), Al Franken (D-Minn.), Sheldon Whitehouse (D-R.I.), Ted Kaufman (D-Del.), John Rockefeller (D-W.V.), Roland Burris (D-Ill.), Michael Bennet (D-Colo.), Frank Lautenberg (D-N.J.), John Kerry (D-Mass.) and Joe Lieberman (I-Conn.).
 
Leahy has introduced legislation to repeal the McCarran-Ferguson Act in previous Congresses, including the 2007 bipartisan Insurance Industry Competition Act, which provided for a broader repeal of the McCarran-Ferguson Act.
 
The text of the amendment is available in PDF format at the top of the page.  The full text of Leahy’s statement on the Senate floor follows.

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Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,
On Introduction Of The Health Insurance Industry Antitrust Enforcement Act
As An Amendment To The Patient Protection And Affordable Care Act
December 1, 2009

Our Nation is in the midst of an historic debate about how to reform our health insurance system.  Three House Committees and two Senate Committees have spent countless hours trying to answer the question of how best to introduce competition and make health insurance affordable for all Americans.  I applaud their efforts, and I applaud the efforts of the many Senators who have fought to bring this important debate to the Senate Floor.
 
I have pushed and will continue to push for provisions that will accomplish the “three C’s” of health insurance reform: choice, competition, and cost control.  I recently reaffirmed my support for a public option.  A public option would give consumers more choices to purchase an affordable and quality health insurance plan and will help drive down overall health care costs.  I will continue to push for inclusion of a public option in the final Senate bill.
 
Amid this discussion of how best to introduce competition into the health insurance industry, it is important to remember that today the health insurance industry does not have to play by the same rule of competition as other industries.  Due to a six decade old special interest exemption, the business of insurance is not subject to the Nation’s antitrust laws.  If there was ever a good reason for such an exemption, it no longer exists.
 
While there are divergent views on the best way to introduce choice and competition into health insurance market, we can surely agree that health and medical malpractice insurers should not be allowed to collude to set prices and allocate markets.   
 
Today, I am filing the Health Insurance Industry Antitrust Enforcement Act of 2009 as an amendment to the Patient Protection and Affordable Care Act.  This legislation, which I introduced in September and which is cosponsored by 18 Senators, will repeal the antitrust exemption for health insurance and medical malpractice insurance providers, and ensure that the basic rules of fair competition apply to the industry as part of the reforms that the larger health care bill will enact.  Our Nation’s antitrust laws exist to protect consumers, and it is vital that the health insurance and medical malpractice insurance companies are subject to these laws.  These laws promote competition, which ensures that consumers will pay lower prices and receive more choices.
 
The Majority Leader, an original cosponsor of this legislation, testified before the Senate Judiciary Committee that “[i]t is of the upmost importance that we make sure the insurance industry is playing by the same rules as everyone else, and that they are subject to competition.”  I could not agree more, and I encourage the Leader to schedule a vote on this amendment early in this debate.  The President also recently supported Congress’s efforts to determine whether any justification remains for permitting price fixing.
 
The vast majority of the companies doing business in the United States are subject to the Federal antitrust laws.  However, a few industries have used their influence to maintain a special, statutory exemption from the antitrust laws.  The insurance industry is one of those few remaining industries.  In the markets for health insurance and medical malpractice insurance, patients and doctors are paying the price, as costs continue to increase at an alarming rate, while patients and small businesses suffer.  This is wrong, and this amendment fixes this problem.
 
The Health Insurance Industry Antitrust Enforcement Act is supported by a cross-section of groups interested in promoting competition, including the Consumer Federation of America, Health Care for American Now, and the American Hospital Association.  I also received a letter from a coalition of 10 State Attorneys General who voiced their specific need for this legislation.  The top law enforcement officers in those states argue that “Repeal of the McCarran-Ferguson exemption would enhance competition in health and medical malpractice insurance by giving state enforcers, as well as federal enforcers, additional tools to combat harmful anti-competitive conduct.”  The letter goes on to state that “The McCarran-Ferguson exemption serves no plausible public interest.”  
 
This amendment will prohibit the most egregious anticompetitive conduct – price fixing, bid rigging and market allocations – conduct that harms consumers, raises health care costs, and for which there is no justification.  Subjecting health and medical malpractice insurance providers to the antitrust laws will enable customers to feel confident that the price they are being quoted is the product of a fair marketplace.
 
The lack of affordable health insurance plagues families throughout our country, and this amendment is a first step towards ensuring that health insurers and medical malpractice insurers are subject to fair competition.  I hope all Senators will join me in support of this important amendment.

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