December 13, 2009

Time for health insurers to compete

As the Senate considers historic reforms to health care and the health insurance industry, it should repeal the health and medical malpractice insurance industries’ exemption from federal antitrust laws. The exemption, enacted nearly 65 years ago, has served the financial interests of the insurance industry at the expense of consumers for far too long.

Meaningful reforms to our health-care system must protect consumers and promote competition. Just as we believe that a strong public option will increase consumer choice, we believe that to ensure true marketplace competition, health insurers and medical malpractice insurers must abide by the same rules of competition as do other industries. Conduct such as price-fixing, bid-rigging and market allocation have no competitive justification.

It is only the health insurance industry’s enormous influence that has maintained this statutory exemption from federal antitrust laws since the McCarran-Ferguson Act was passed. Meanwhile, patients and doctors have continued paying artificially inflated prices, and costs continue to rise at an alarming rate. This hurts patients, American businesses and taxpayers. And, ironically, health insurers have at times sued doctors and hospitals under the very rules from which they are exempt.

Health insurers should have no objection to complying with the same antitrust laws that other businesses must follow. If insurers are not engaging in antitrust violations, they should not fear federal law that guards against such behavior. Ending the antitrust exemption that sets the insurance industry apart from virtually all other businesses should lead to more competition and lower insurance costs for all Americans. The industry’s steadfast opposition to this repeal raises more questions than it answers.

The lack of affordable health insurance plagues families throughout our country, and the rising prices that hospitals and doctors pay for medical malpractice insurance drains resources that could otherwise be used to improve patient care. Antitrust oversight in these industries would reassure consumers that insurers are not colluding to raise prices artificially.

In September, we introduced legislation to ensure that the basic rules of fair competition apply to health insurers and medical malpractice insurers. Support is growing for the Health Insurance Industry Antitrust Enforcement Act. Our nation’s antitrust laws exist to protect consumers and promote competition, which ensures that consumers will pay lower prices and receive more choices.

While some in Congress will do all they can to stymie progress toward enacting needed reforms to our health-care system, Americans are suffering. Repealing the McCarran-Ferguson Act is neither a Democratic nor a Republican idea; it has received bipartisan support in the past. When it comes to better business practices, protecting consumers and encouraging competition, we should not surrender to the political interests of the health insurance lobby.

American families, doctors and hospitals rely on insurance. It is important to ensure that the prices they pay for this insurance are established in a fair and competitive way. Repealing the health insurance industry’s unfair exemption from federal law is one important step toward meeting the health care needs of all Americans.

By: Patrick Leahy and Sheldon Whitehouse