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Senate introduces bipartisan bill to amend McCarran-Ferguson Act

February 07, 2019

By Jennifer Garvin

Washington — Legislation was introduced in the U.S. Senate Feb. 6 to repeal the McCarran-Ferguson antitrust exemption for health insurance companies.

S 350, the Competitive Health Insurance Reform Act, was introduced in the 116th Congress by Sens. Steve Daines, R-Mont., and Patrick Leahy, D-Vt. The bipartisan bill calls for authorizing the Federal Trade Commission and the Justice Department to enforce the federal antitrust laws against health insurance companies engaged in anticompetitive conduct. It would not interfere with the states' ability to enforce their own regulations, antitrust statutes and consumer protection laws.

The ADA, which has advocated for repeal of the 1945 McCarran-Ferguson Act antitrust exemption for the health insurance industry for more than 20 years, praised the legislators for introducing the legislation.

"If health insurance companies had to follow all of the antitrust laws when setting rates and designing coverage, it would increase competition among the companies that insure both individual customers and purchasers of large group policies," said ADA President Jeffrey M. Cole, in a statement.

The bill is narrowly drawn to apply only to the business of health insurance, including dental insurance, according to the statement. The Association said its effect will be to remove the apparent hesitancy of the FTC and the Justice Department to enforce the federal antitrust laws against health insurance companies engaged in anticompetitive conduct.

Under S 350, those agencies would not interfere with the states' ability to enforce their own regulations, antitrust statutes and consumer protection laws. If enacted, the bill would amend a section of the McCarran-Ferguson Act of 1945, which exempted the insurance industry from important provisions of the Sherman Act and the Clayton Act — acts that have the purpose of ensuring fair competition. This legislation will help level the playing field between health insurers, providers and consumers. The House of Representatives is expected to introduce a companion bill in the near future.

"For far too long, health insurance companies have gotten away with taking advantage of consumers and charging them outrageous prices for their health care," said Sen. Daines, who first introduced the bill in 2018. "It's time we look into these companies' practices by demanding transparency in order to hold them accountable."

"This bill will curtail the most egregious anticompetitive practices, like price fixing, bid rigging and market allocations, which hurt consumers and drive up health care costs," Sen. Leahy said.

Follow all of the ADA's advocacy efforts at ADA.org/advocacy.