Today the House will vote on the stand-alone health insurance industry anti-trust repeal bill, H.R. 4626, the "Health Insurance Industry Fair Competition Act." The bill's being brought to the floor by Reps. Tom Perriello (D-VA-05) and Betsy Markey (D-CO-04).
Guess who opposes it? The bastion of free-enterprise and competition, the U.S. Chamber of Commerce.
The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, opposes H.R. 4626, the "Health Insurance Industry Fair Competition Act," which the Chamber believes is a distraction from the important goal of improving America’s health care system, and a bill that would do little to address health care costs.
H.R. 4626 would purportedly reduce health care costs by repealing the anti-trust exemption for health insurance companies. However, misinformation about current law under McCarran-Ferguson Act has permeated the current debate. Under current law, it is illegal for a health insurance provider to engage in price-fixing, boycotts, bid-rigging, market allocation agreements, and other uncompetitive behavior. States already enforce these provisions. Thus this bill will do nothing to protect consumers and is a solution in search of a problem.
Further, the bill could have unintended consequences. Small insurers would be at a great disadvantage in attempting to develop accurate rates, since they would lose access to shared data. Larger insurers would face legal uncertainty and be subject to new litigation. Even worse, insurers may have to suspend quality improvement programs due to these lawsuits as they wait for courts to clarify that some collaboration among companies is acceptable.
The Chamber's belief in a free-market, competitive system would be conditional, you see. One of the problems that the this anti-trust exemption for insurance companies has is that the combination of weak state oversight, and not federal oversight, is that no one really knows how much anticompetitive behavior the companies have engaged in. But the Anthem case in California might just provide a clue. 700 violations in three years in California, extrapolate that out to 50 states, and we have a problem.
In an article for The Nation Darcy Burner provides some background:
Since 1945, health insurance companies have been allowed to collude to fix prices. The McCarran-Ferguson Act exempted them from the anti-trust regulations that normally prohibit such behavior. And in a country in which more than 80 percent of markets have only one or two insurers, insurance companies just haven't bothered to compete. Insurance is the only major industry in the United States, besides Major League Baseball, where such collusion and price-fixing is allowed.
Even the most basic understanding of economics makes it clear that without competition, markets won't efficiently solve economic problems. As a result, for sixty-five years the American people have overpaid for insurance; the Consumer Federation of America estimates the anti-trust exemption for insurance companies is costing Americans an extra $50 billion in premiums per year.
Perriello's bill is so clearly both pro-populist and pro-free market that previous versions have received accolades from Republicans--including current Louisiana Governor Bobby Jindal, a conservative Republican, who said in 2007, "The insurance industry, as the result of an antiquated law, is currently one of the only consumer industries in the nation that is exempt from anti-trust laws. This leaves every American at risk to collusion and price fixing by the insurance industry, a practice that is unfair at best, and despicable at worst."
What's this bill makes all too clear is that whether you're a free-market-loving Republican or a progressive populist Democrat, the only principled way to vote is in favor. With no loopholes, no complications and at two pages, the only reason to vote against it is to protect insurance company profits against fair competition. It's a clear us versus them for populism--on either side of the political spectrum.
It's a very clear choice, particularly since the Citizens United decision. This is a perfect litmus test vote for whether your representative is on your side, or your insurer's.
Update: Members are currently voting on the rule for the bill. This is a procedural vote to approve the rule so that they can move on to the actual bill.