Congress Reconsiders Anti-Trust Exemption for Health Insurance Industry

The Senate Judiciary Committee has scheduled a hearing entitled, “Prohibiting Price Fixing and Other Anticompetitive Conduct in the Health Insurance Industry” scheduled for Wednesday, October 14, 2009. The hearing concerns identical new bills (S. 1681 and H.R. 3596) that NASW is watching. The legislation would eliminate a long-standing federal law that excludes the insurance industry from federal anti-trust regulation. Under the Constitution, regulation of interstate commerce is a federal responsibility. However, in 1945 the McCarran-Ferguson Act authorized states (in the absence of federal law or regulation) to regulate all insurance products, including health, leading to the state regulatory system in place today. This Act also exempted the insurance industry from federal anti-trust law. Therefore, the Justice Department cannot now enforce federal antitrust law on the insurance industry.

NASW is following federal legislation that would preempt state regulation of health insurance. Among the profession’s concerns in this debate are state-level provider mandates and mental health parity laws. Because of the severe dysfunction in the current state-based health insurance market, over the long term Congress appears likely to “harmonize” state health insurance rules by shifting regulation of the market back to federal control. The subject of this new legislation is more limited in scope, focusing only on the industry’s antitrust exemption. Currently the health insurance industry response to the legislation has been muted, arguing that they currently do not share health care pricing information and its elimination would not have a significant impact on their practices.

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