Reps. DeFazio, Slaughter Introduce Legislation to Protect Consumers from Health Care Industry Price-Gouging
WASHINGTON—Reps. Peter DeFazio (D-OR) and Louise Slaughter (D-NY) have reintroduced the Health Insurance Industry Fair Competition Act, H.R. 617, which repeals the antiquated exemption that allows the health insurance industry to operate beyond the reach of federal antitrust laws.
The McCarran-Ferguson Act of 1945 exempts the health insurance industry from federal antitrust laws that promote fair competition. Bolstered by the Affordable Care Act (ACA), states have the power to regulate antitrust behaviors by the health insurance industry. Under President Trump’s proposed repeal of the ACA, those regulations would likely be loosened, making it easier for insurance companies to engage in anti-competitive behavior and raise premiums.
“Whatever the eventual ACA replacement looks like—if Republicans ever come up with one—we must ensure that consumer protections are in place to guard against the worst of the insurance industry’s abuses,” said Rep. Peter DeFazio. “The Republican solution to those problems is to simply trust that free market competition will take care of the worst of these bad actors. However, there can be no competition in the health insurance market without eliminating this antiquated provision. The best way to protect consumers and to ensure fair competition is to end this out-of-date, unfair exemption from antitrust laws.”
“The pledge from Republican leaders in Congress and the president to repeal the Affordable Care Act will reverse years of progress in health care and drive up costs for consumers at rates that could make coverage unaffordable. That’s why introducing this legislation today is so important. Preventing health care companies from colluding to drive up prices and limit competition will slow down what could be especially exorbitant rate increases for many constituents in the years ahead if Republicans repeal the Affordable Care Act. It’s time to finally make the health care industry follow antitrust laws so Fortune 500 companies and well-paid CEO’s no longer receive special treatment. It’s good policy, and given the Republican agenda, especially important for consumers,” said Rep. Louise Slaughter.
While ending the McCarran-Ferguson Act would prohibit collusion by insurance companies on pricing, H.R. 617 also includes a provision that would allow health insurers to continue to share historical loss data. Such data includes peril, risk and hazard information as well as payout information to develop more accurate premium rate models. By protecting the right of the insurers to share this data, small insurers will get access to such information and will be less likely to be priced out of the market.
The McCarran-Ferguson Act, passed in 1945, exempts the business of insurance from the federal antitrust laws that promote fair competition. The only other industry exempt from antitrust laws is Major League Baseball.
The Health Insurance Industry Fair Competition Act would repeal the exemption and give the Department of Justice and the Federal Trade Commission the authority to apply antitrust laws to anticompetitive behavior by insurance companies. This Act would not affect the ability of each state to regulate the business of insurance. Similar legislation passed the House of Representatives in 2010 with overwhelming bipartisan support in a vote of 406-19.