Rep. Johnson votes to repeal insurance industry's antitrust exemption

February 25, 2010
Press Release

As Chairman of Competition Policy Subcommittee, Rep. Johnson influenced development of new policy:

 WASHINGTON, D.C. – Rep. Hank Johnson (D-GA) today voted in favor of the Health Insurance Industry Fair Competition Act, which repeals the health insurance industry’s antitrust exemption and restores competition and transparency in the health insurance market.

“This is a victory for the American consumer,” said Rep. Johnson, troubled by recent news that some Georgians face a 72 percent increase in their health insurance premiums. “It is a critical step toward comprehensive health care reform.”

Seventy-five percent of Georgia’s health insurance market is controlled by just two companies. Rep. Johnson said his vote will provide Georgia’s families and businesses with more choice and more power as they benefit from real competition between health insurers.

As Chairman of the Judiciary Subcommittee on Courts and Competition Policy, Johnson led efforts to strip health insurers of their antitrust exemption. His bill, H.R. 3596, was incorporated into the comprehensive health care reform bill that passed the House in November 2009.

The bill amends the McCarran-Ferguson Act of 1945 to repeal the blanket antitrust exemption that has long benefited insurers at the expense of consumers.  With the enactment of H.R. 4626, health insurers will no longer be shielded from legal accountability for price fixing, anti-competitive collusion, division of territories or markets amongst themselves, sabotage of competitors to gain monopoly power, and other such anti-competitive practices. 

Key Points:

●   Removing health insurance’s antitrust exemption will also give antitrust enforcers such as the U.S. Department of Justice and the Federal Trade Commission the authority to investigate any evidence of possible collusion within the health insurance industry – a move that puts an end to the 65-year-old prohibition on the federal government’s ability to investigate and hold accountable bad actors in the health insurance industry.

●   Removing this anti-trust exemption not only enables appropriate enforcement; it will also give all health insurance companies healthy competitive incentives that will promote better affordability, improved quality, increased innovation, and greater consumer choice – as the antitrust laws have done throughout the rest of the economy for over a century.

●   Removing this antitrust exemption has been a bipartisan legislative priority for law enforcement groups and consumer groups such as the Consumer Federation of America for more than two decades.  Two separate bipartisan antitrust commissions, one in the 1970s and another during the Bush Administration, have also called for removing the exemption. 

●   Some opponents of the bill argue that state insurance commissioners can effectively police health insurers’ antitrust violations under state law.  But experience contradicts this.  A recent study found that state insurance commissioners have not brought any actions against health insurers for anticompetitive conduct over the last five years.  

●   The bill makes absolutely no change in the state-based system for regulating insurance.  The part of the McCarran-Ferguson Act that reaffirms state regulatory and taxing authority for the insurance industry remains unchanged. 
   
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