Insurance Industry Antitrust Fight Headed to Conference Committee
The insurance industry successfully fought off a Senate threat to
revoke its antitrust exemption as part of health care reform, but the
issue lives to fight one more battle in the conference committee
negotiations that will take place between the two chambers.
The issue surfaced in mid-October, shortly after the industry lobby,
America's Health Insurance Plans (AHIP), pushed hard against the
Democratic health care reform effort, claiming it would significantly
Senate Majority Leader Harry Reid (D-Nev.) responded by
saying the industry should lose its cherished antitrust exemption --
implemented some 60 years ago by the McCarran-Ferguson Act -- and be
forced to compete under the same rules as any other enterprise.
"Insurance companies have become so large they dominate entire
regions of the country," he said. "They have become so powerful they
block start-up businesses from entering the market, and they put
smaller companies out of business. They have become so dominant that
they dictate business practices. They are so influential that they
exert tremendous influence over public policy."
House Speaker Nancy Pelosi (D-Calif.) seconded Reid
the next day, twisting the knife and adding that "it is well known to
the public that the health insurance companies are the problem." The
following day Judiciary Committee Chairman John Conyers announced a
hearing and a committee vote on revoking the exemption. It passed and
was included in the House health care bill that passed two weeks ago.
The insurers recognize the politics at work. "Health insurance is
one of the most regulated industries in America at both the federal and
state level. McCarran-Ferguson has nothing to do with competition in
the health insurance market. The focus on this issue is a political
ploy designed to distract attention away from the real issue of rising
health care costs," AHIP spokesman Robert Zirkelbach told HuffPost.
The Senate, characteristically, has not seen such a one-two-three process unfold.
A week before House passage, HuffPost reported
that Reid decided not to include the repeal of the exemption but to go
for it as a floor amendment instead. The move was seen as a sop to
Nebraska Democrat Ben Nelson, an industry backer who had yet to offer
his support for Reid's motion to proceed and who is a strong public
supporter of keeping the antitrust exemption in place.
Asked by HuffPost if he had asked Reid to drop the measure in
exchange for his vote, Nelson demurred. "That would come as a surprise
to Harry Reid," he said of multiple reports that he had pushed for it
to be left out.
But there's more than one way to push in the Senate and, regardless
of whether Nelson raised the issue with Reid, even the Capitol
cafeteria workers were aware of Nelson's strong position.
Nelson argues that repealing the exemption wouldn't hurt the big
insurers because they're already so big they don't need to collude with
each other. Repealing it, he argues, would only hurt the little guys.
But there are very few little guys left: one or two big insurers are dominant in almost every region of the country.
Nelson, now that he has voted to move the bill forward, is still
threatening to filibuster a final bill if he finds it objectionable.
Nelson and others want the public health insurance option stripped from
the Senate bill, but if it goes to conference too friendly to the
industry, the antitrust repeal is likely to be in the bill that comes back. For the industry, it's pick your poison.