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Ending Antitrust Exemption For Insurers May Not Affect Consumers, Analysts Say

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Kaiser Health News: "Proponents say that the legislation would spur competition among insurers and bring down costs for consumers. Reps. Tom Perriello, D-Va., and Betsy Markey, D-Colo., who are sponsoring the bill, said in a press release it would 'end special treatment for the insurance industry that allows them to fix prices, collude with each other, and set their own markets without fear of being investigated.' But many antitrust experts say that ending the exemption -- by repealing the 1945 McCarran-Ferguson Act -- wouldn't significantly increase competition or reduce premiums." The federal government is already "responsible for antitrust enforcement involving mergers and acquisitions" for insurers (Gold, 2/8).
McClatchy: The antitrust bill is part of an effort by House Democratic leaders "to start moving pieces of the [health reform] bill that they think can win approval. They also figured that simply having the debate - televised on C-SPAN and covered by the news media - would get the public re-engaged. 'This is very popular with the public. The market power of insurers has been blamed for increased health insurance premiums,' said Austin Frakt, a Boston University health economist. But rising costs, he said, stem from money passing through insurance companies to health care providers such as doctors and hospitals, and therefore 'passing something focused on insurers like this is not going to do a lot. It's not the reform that's really needed'" (Lightman, 2/7).
NPR: "David Balto, a former policy director at the Federal Trade Commission, now a senior fellow at the liberal Center for American Progress ... says the antitrust exemption has been a 'substantial obstacle' to consumer protection and other enforcement efforts aimed at insurance companies at both the state and federal level. 'In over a third of the states, including all the states with highly concentrated [insurance] markets, there were zero enforcement actions over the past five years,' he says. Backers of the legislation say they hope that more aggressive enforcement of antitrust laws against health insurance companies can reverse the trend toward consolidation - where just one or two or a handful of companies control the entire market. And that more competition can mean lower premiums" (Rovner, 2/8).
Politico: Perriello, one of the bill's co-sponsors, "is a test case, of sorts, to gauge the political fallout of voting for the legislation. His support has emboldened a slew of challengers in his central and southern Virginia district. He won the seat in 2008 from Virgil Goode, a six-term Republican lawmaker, and is now considered one of the more endangered Democrats in Congress. But he also left himself open to voting for a more sweeping package, should Democratic leaders in the House and Senate come to an agreement" (Sherman, 2/5).
Minnesota Public Radio: "The Minnesota Department of Commerce, which regulates insurance here also has some concerns about repealing the exemption. It's conceivable that some of the state's regulation power would shift to the federal government. Deputy Commerce Commissioner Manny Munson-Regala said a shift could mean a loss of money for Minnesota's treasury. 'We, like other states, collect a tax on the premium that companies write,' Munson-Regala said. 'If suddenly the federal government has a role in the regulation of those companies it's not clear to us that they'd allow us to continue collecting that revenue. They might insist on sharing that revenue'" (Stawicki, 2/8).

This information was reprinted from with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at

© Henry J. Kaiser Family Foundation. All rights reserved.

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