October 16th, 2009

Philadelphia Inq reports:

The Democrats have just fired their biggest guns at the insurance industry, but unfortunately they are shooting very loud blanks.

That’s what they did Wednesday, when the Senate Judiciary Committee held a hearing titled Prohibiting Price Fixing and Other Anticompetitive Conduct in the Health Insurance Industry.

There is no way in the world that health insurance companies are going to allow Congress to repeal the McCarran-Ferguson Act, which gives them a pass from federal antitrust enforcement. The insurance industry is the only one, other than Major League Baseball, to enjoy this exemption.

But don’t expect the majority in Congress to play ball with those who are serious about getting rid of that exemption, even though the ever-quotable Sen. Chuck Schumer (D-N.Y.) called it “one of the worst accidents in American history.”

It was no accident at all. McCarran-Ferguson has been with us since 1945, when the industry got Washington’s willing lawmakers to reinstate the industry’s immunities from federal regulation after the Supreme Court had, a year before, overturned the apple cart of special treatment insurers had gotten since right after the Civil War.

Because of McCarran-Ferguson, they must be regulated state by state, which is an ineffective patchwork compared with one national set of standards.

The result is that the insurance behemoths don’t have to pay attention to the antitrust restrictions that prevent normal companies from colluding and engaging in their other anti-competitive practices.

That’s why Americans can’t take their business elsewhere when their health insurer cheats them. There are no real alternatives. When it comes to abusive practices, the companies are allowed to all be in this together.
Understandably, they cherish this exemption. Since it has meant they could accumulate limitless wealth, all they have to do is shower a little bit of it into the campaign coffers of this generation’s pliant politicians, and they will keep the advantage that lies at the heart of health care dysfunction in this country.

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