In recent years, according to sponsors of the Competitive Health Insurance Reform Act proposal, major players in the health care industry have been taking advantage of a loophole that has led to increased consolidation.
The House of Representatives this week will curb the rate of consolidation in the health care industry, a practice that many have argued in recent years has squelched competition and led to increased prices for consumers.
The Competitive Health Insurance Reform Act, reintroduced after a failed bid in 2017, would roll back an exemption created by the McCarran-Ferguson Act of 1945 that allowed health care payers to coordinate on pricing, which opponents have argued has led to price-fixing.
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"As long as this exemption is still on the books, health insurance companies legally can, and do, collude to drive up prices, limit competition, conspire to underpay doctors and hospitals, and overcharge consumers," Peter DeFazio (D-OR), one of the bill's sponsors, said in a press release. "My legislation will protect consumers and make sure the health insurance industry plays by the same rules as virtually every other industry in America."
Originally, according to HealthPayerIntelligence, the loophole was intended to make it easier for new payers to enter the industry. Such arrangements would otherwise be in violation of the Sherman Act, which polices anti-competitive behavior. In recent years, according to sponsors of the Competitive Health Insurance Reform Act proposal, major players in the health care industry have been taking advantage of the exemption.
"There is no reason in law, policy, or logic for the insurance industry to have special exemptions that are different from all other businesses in the U.S. The government should not be picking winners or losers, and the insurance industry should also have to comply with federal antitrust laws," Rep. Paul Gossar said in a statement.
Health insurance and payer have a different view, of course, arguing that the provisions of the McCarran-Ferguson Act allow individual states to better oversee their health insurance markets.
In a statement to HealthPayerIntelligence, a spokesperson for the Association of Health Insurance Providers (AHIP) wrote, "Legislative proposals that would repeal or amend antitrust-related portions of the McCarran-Ferguson Act would undermine states' authority and harm Americans. Repeal of McCarran-Ferguson in general, or the antitrust exemption in particular, would do nothing to increase competition in health insurance markets; is not necessary to allow sales across state lines; and would harm millions of Americans by reducing competition, choice, and innovation."
Despite the support of the House, it's most likely the bill will not make much progress in the Senate.
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Emily Payne
Emily Payne is director, content analytics for ALM's Business & Finance Markets and former managing editor for BenefitsPRO. A Wisconsin native, she has spent the past decade writing and editing for various athletic and fitness publications. She holds an English degree and Business certificate from the University of Wisconsin.
