Wednesday, October 14, 2009

Another Dimension to Health Care Reform

The mainstream media has practically salivated the past few weeks over the health care reform bill coming out of the Senate Finance Committee, which the committee approved Tuesday by a 14-9 vote. The vote was historic in the sense that it meant all five health care bills in both chambers of Congress (three in the House, two in the Senate) made it out of committee, which means Congress can now begin the process of combining and reconciling them.

If the process holds, and doesn't get derailed, a bill might be on President Obama's desk by the end of 2009. The quality of said bill remains to be seen, since the Finance Committee bill is being panned by both sides of the aisle (now there's bipartisanship!), but the truth is ... the process is further along than it's ever been.

But one thing's missing. There's one aspect of the health care reform debate that no one is talking about. Almost no one in Congress, no one in the White House, and certainly no one in the mainstream media.

As it stands today, the health insurance industry is exempt from the Sherman Anti-Trust Act, which was passed in 1945 and forced virtually every other industry to maintain competition and fair treatment of customers. The Sherman Anti-Trust Act makes such practices as price-fixing and market allocation to limit competition illegal -- but health insurance and medical malpractice insurance companies are exempt from this law.

Instead, insurance companies are "covered" by the McCarran-Ferguson Act, which was also passed in 1945 after a Supreme Court case in which the South-Eastern Underwriters Association, which offered fire and other types of insurance, argued that insurance did not constitute commerce, and was thus exempt from the Sherman Anti-Trust Act. The SEUA won the case, and the McCarran-Ferguson Act in essence gave health insurance companies the right to ignore federal anti-trust regulations that most other industries had to follow.

On Sept. 17, Senator Patrick Leahy (D-Vt.) introduced the Health Insurance Industry Anti-Trust Enforcement Act of 2009 (S. 1681 and H.R. 3596, which was introduced by Michigan Democratic Rep. John Conyers), which would effectively repeal the protections afforded to the health insurance industry by the McCarran-Ferguson Act. Though this bill is separate from the health care reform debate, it remains part of the process, since part of the reason for reform is the fact that the insurance companies are not heavily regulated.

As they stand now, health care reform bills would make it illegal for insurance companies to deny people coverage on the basis of pre-existing conditions, or to drop a person's policy arbitrarily once they become sick. These are important provisions to be sure, ones that have received little play in the mainstream media since virtually everyone agrees upon them (why focus on areas of agreement when the debate over the public option is so much more entertaining?).

In conjuction, passage of Sen. Leahy's Health Insurance Industry Anti-Trust Enforcement Act would enact further regulations, making such practices as price-fixing and market manipulation illegal. As it stands now, some states have one private insurer that holds at least a 70-percent market share. The lack of competition is part of what drives insurance premiums upward; with anti-trust legislation, insurance companies would be forced to compete, which (theoretically, anyway) would lower premiums.

The insurance companies charge whatever they please, knowing full well consumers do not have a myriad of options. Auto insurance is more affordable because consumers have several companies to choose from; one can pick GEICO or Progressive or State Farm or Allstate or Nationwide or any number of other companies. In a lot of states, you're stuck with one health insurance company; it's either Aetna or nothing.

Cigna or nothing.

WellPoint or nothing.

Naturally, the media said nothing about this bill, which would be another step in the process of fixing this country's broken health insurance system. The website Politico did, however, run a story on Wednesday reporting that Sen. Chuck Schumer (D-N.Y.) would call for an amendment to the health care reform bill that would remove the anti-trust exemption that health insurance companies enjoy.

Senate Majority Leader Harry Reid (D-Nev.) also expressed support for this amendment.

Removing anti-trust exemptions and holding this industry to the same standards as almost every other industry in the country is not only practical, it's the right thing to do. Competition and choice would lower costs, and Sen. Leahy's bill is one step in that process.

Write your Congressmen, write your Senators, write the White House asking them to support the Health Insurance Industry Anti-Trust Enforcement Act of 2009 on top of true health care reform. This bill is too important to hide in the proverbial weeds.

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