The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

In spite of all the hem-hawing and confusion surrounding American health care reform, one senator is taking initiative.

Senator Patrick Leahy, of Vermont, has recently introduced the Health Insurance Industry Antitrust Enforcement Act into Congress, which would eliminate current antitrust exemptions for the insurance industry, thereby making them function like almost every other business in America. Since 1945, health insurance companies have been exempt from anti-trust regulations, which has shielded them from many of the same free-market factors that affect other businesses in our country. According to Leahy,

The two key provisions of the Health Insurance Industry Antitrust Enforcement Act will repeal the federal antitrust exemption for health insurance and medical malpractice insurance companies for flagrant antitrust violations, including price-fixing, bid rigging, and market allocations, and subject health insurers and medical malpractice insurers to the same good-competition laws that apply to virtually every other company doing business in the United States.

This reform would greatly help the American people, since it would subject health insurance companies to the same effects of competition and good business that affect the rest of our country’s economy. Since they would no longer be protected for mistreating their customers, they would have to compete to offer better service, which would lead to better health care coverage for average Americans who are now paying exorbitant premiums and being dropped by insurance companies at the first sign of physical ailment.

The Washington Independent quotes Robert Hunter one of the great commentators on the insurance industry:

Robert Hunter, Director of Insurance for the Consumer Federation of America and former Federal Insurance Administrator under Presidents Ford and Carter, saw it differently. In his view, the antitrust exemption, intended initially to be temporary but made permanent during closed-door conference committee sessions of Congress more than 50 years ago, must be repealed to overcome the insurance industry’s anticompetitive practices that have led to higher prices and reduced services. “It is high time that insurers played by the same rules of competition as virtually all other commercial enterprises operating in America‘s economy,” he testified.

According to Hunter, health insurance companies have been able to consistently pay less on claims by agreeing to lower the amounts they reimburse doctors and hospitals for services; adopting similar clauses in their contracts that limit their liability in unfair and abusive ways; agreeing to cut back coverage to certain places, and using similar claims processing systems designed to systematically underpay claims.

As Hunter testified, federal authorities have recommended eliminating or cutting back the antitrust exemption for health insurers and medical malpractice insurers on at least four different occasions after studying it. But Congress has never taken that step, presumably due to the power of the insurance industry lobby.

With the soaring cost of health care now in the spotlight, this may finally be the right time.

As reported by The Pop Tort one of the best consumer Blogs that I follow, the upcoming battle with Big Insurance should be entertaining:

Attention all doctors who complain about the cost of insurance rates! An important hearing is being held right now by the U.S. Senate Judiciary Committee that concerns two new bills that could ultimately eliminate your concerns in a heartbeat. The bills would repeal the anti-trust exemption under the McCarran-Ferguson Act, which makes insurance purveyors the only industry in America (other than Major League Baseball) exempt from federal anti-trust laws that prevent collusion and price-fixing.

The hearing, which is being carried live on the web at 10AM from the Dirksen Office Building (Rm 226), has been given the snappy title, “Prohibiting Price Fixing and Other Anticompetitive Conduct in the Health Insurance Industry,” and there’s an impressive line-up of witnesses, including Senate Majority leader Harry Reid (D-NV), and our friend and colleague, J. Robert Hunter, who is Director of Insurance of the Consumer Federation of America (CFA), former Commissioner of Insurance for the State of Texas, former Federal Insurance Administrator under Presidents Carter and Ford, and a co-author of several studies by the Americans for Insurance Reform (AIR), including the most recent one, True Risk: Medical Liability, Malpractice Insurance and Health Care.

If you are an American who loves the free-market system, do not sit by and let a company that is in charge of your health operate in a way that abuses your rights. Contact your local representative and tell them you support this bill.


  1. Gravatar for jim O'Hare aic ais
    jim O'Hare aic ais

    Politicians are elected by popular vote to represent corporations. They do not even attempt to hide it any longer. So the Pols are going to vote to end the insurance cartels little feifdoms.

    Do you really think so? I believe that there are 1500 companies that provide healthcare coverage. Alabama has access to 2 of them. Do you think BCBS , and their lobby is going to allow access w/in their borders. There is a better chance of the Dodgers moving back to Brooklyn.

    There is alot of money in sick people and no reason to make them better. THAT costs money!! Then they insult us and call it healthcare.

    It would be great to see it. A sure sign of getting old is recognizing your own pessimism where optimnism use to live.


    jim VP med mal claims.

  2. Thanks for the Comment Jim. I am interested in your handle as "VP med mal claim". Do you work for an insurance company? Alothough I battle with insurance adjusters in my job I value insurnace. The economy in the U.S. depends on insurance and so do we as individuals. I just want insurance to be a responsible part of the economic system. I also feel sorry for doctors who hae 25 year old insurnace adjecters telling them how to practice medicine and cut their billings. I don't think doctors - in general - get fairly compenstaed for their work.

  3. Gravatar for jim O'Hare

    Wayne_ I am VP of claims for physicians Ins Co in Florida. I have nothing to do with healthcare HMO stuff, although I was an xray tech prior to starting my MM claims career in 1985.

    I do not get how Docs are allowed to practice w/o insurance. This should be mandatory via Gov't or the hospitals. I need it to drive and Docs can do as much damage as I can with a car.

    The tentacles of these HMO pirates reach deep. Healthcare is a moral question with cash for collateral. Morals and money historically mix well!!!

  4. Thanks Jim. Interesting. Thanks for your insights. You have an interesting viwe of the controversy. I look forward to hearing from you again. You have something to offer.

Comments are closed.

Of Interest