Senators to strip health insurers of antitrust exemption

[cali]

By Michael O'Brien - 10/21/09 10:58 AM ET

A group of Senate Democratic leaders is set to announce Wednesday that they have decided to strip health insurers of their antitrust exemption.

According to a post on Twitter from Senate Majority Leader Harry Reid (D-Nev.) this morning, Reid, Senate Judiciary Chairman Patrick Leahy (D-Vt.), and Democratic Caucus Chairman Chuck Schumer (D-N.Y.) would make the announcement about the antitrust rules this morning.

Reid tweeted Wednesday:

Leahy, Schumer and I will announce today @ 11:30am ET that we will strip the health ins industry of its exemption from antritrust laws

The move mirrors actions taken by House leaders to also include the change in antitrust rules in their version of health reform legislation.

The House and Senate Democrats' jab toward insurers also comes after the industry had launched critical reports over the differing health bills, warning that the reform plans would result in higher premiums for consumers, were they to become law.

Reid's words serve as confirmation that the Senate will move on the initiative, first floated by Leahy, after momentum appeared to move toward the new antitrust rule.

http://thehill.com/blogs/blog-briefing-room/news/64079-senators-to-strip-health-insurers-of-antitrust-exemption

[katandmoon]

1. I'm so used to getting fleeced I want to ask, what's the catch? This seems to good to be true!

[saracat]

2. I would ask how this will affect everyday Americans.

[HereSince1628]

11. I agree, what is this worth to the Insurance Co's?

I don't know what leverage that gives the Congress in this debate.

Formally it seems to means that they couldn't collude in dividing up the interstate insurance business.

Whould that, for example, open the door for a national nonprofit co-op rather than state-by-state co-ops?

[rhett o rick]

26. Currently the health insurance industry is one of the only industries that can

collude to fix prices. They have in many cases, divided up states between "competing" companies. These companies then have virtual monopolies and consumers have no choice for who they buy insurance from. Without this allowance, the government can prosecute insurance companies that fix prices and form monopolies. If enforced, this would lead to competition and lower insurance costs.

[saracat]

34. I understand that but it is the "enforcement" factor that concerns me.

countless cases against the oil industires have been prosecuted and yet sky high prices and price fixing still goes on. Regulations vary state by state.While this is not a bad move, I am not sure it is all that threatening to the insurance companies as many might think. I know they don't like it but they, too, know the reality.

[rhett o rick]

54. I agree completely. It cant be effective without enforcement. nt

[thereismore]

4. You're right. Seems like this will cause a shitstorm of opposition from big money, but

that's good. Let them sweat this one, maybe they will let the PO slide.

[redqueen]

12. lol... I had the exact same reaction. (nt)

[harun]

21. Me too. Thought "They must be getting ready to really F us with something if we are getting this!".

[rudy23]

22. Yep. My exact thoughts. nt

[Beetwasher]

31. No, The Ins. Co's Seriously Pissed Off The Admin. And Dems With Their Threats Of Jacking Up Prices

And their bullshit "report" that they concocted. They REALLY pissed them off. This is in answer to that. They fucked themselves.

[harun]

53. I hope you are right, we will see soon enough.

[Whisp]

3. I'll wait to hear it's official, but....

if that does happen.

holy crap it's a huge big deal and should gain at least one day of silence from the people here that shit on Obama daily.

[cali]

9. I don't see how this has anything to do with Obama

Leahy has introduced this year after year.

[saracat]

16. True.

[Whisp]

37. there you go.

if he introduced it during the Bush years without passing, introducing it during Obama's admin and it passing Has Something to Do with Obama, no? the climate, the demand for some 'mopping up' can have a lot of good things happening not directly pinned to Obama maybe but much due to him nonetheless.

btw, which asshole gave these insurance corporations the exemption to begin with?

[saracat]

44. I want to know who gave them the exemption as well!

[cliffordu]

10. Nah, these idjits can't miss a trick, real or not.

[Why Syzygy]

18. We should get an eternity of silence

from those who bash people who have concerns about Obama's decisions. Just shut it off already.

This has nothing to do with Obama. Let's see if he even goes along with it!

[Barack_America]

5. Pardon?

Have I slipped into Bizarro world again? Is Reid's name actually mentioned in this article?

[Brigid]

6. Oooh, me likey.

Me likey very much. :evilgrin:

Please, God, please let this be true!

[merh]

7. Strip all insurance companies of the anti-trust exemption.

The problem with the claims for the storm damage over the last 10 years has been the insurance companies collusion to deny claims.

[RKP5637]

8. I don't see why they were exempt in the first place or any monopoly. n/t

[Eric J in MN]

13. yeah, I don't get why they were exempted, either (NT)

NT

[Whisp]

17. it's called bribes. nt

[RKP5637]

35. Yep, I think you're right on. So much crap goes on and slight of hand. ...

Being in congress is such a sweet deal. I know many are forthright and honest, but I suspect if we ever knew all of the crap that goes on it would be beyond belief. Some of it leaks out, but I bet the majority of it never does.

I would think the temptations are huge not to accept just a little here and there and rationalize it as really OK. The revolving door between congress, lobbyists and corporations is revolting. It's no wonder America is run by corporate empires and not the politicians... in many cases they are the same. At least to me.

Here's my shopping list! I guess I'm getting off-topic, but I'm wound up...

NO revolving congressional, corporate and lobbyist doors for congressional jobs after having served or having been voted out. I would also like to see term limits and limited funding for political runs, as well as time limits for campaigning...

ALL gov. contracts go through the GSA bidding process, not these damn no-bid contracts Cheney was fond of for his own interests...

The elimination of the inane electoral college, as well as district borders and the districting which in essence rigs the voting. And an absolute paper audit trail for all voting. No receipted audit trail is ridiculous.

Corporate donations eliminated all together. No wonder this place loosely called a country is in such a perpetual mess when you add up the crapola.

I'll stop here... :grr:

[Whisp]

39. I would like to know which admin gave them this exemption. nt

[RKP5637]

45. The Mccarran-Ferguson Act of 1945 ... from what I understand ...

From what I can find it was the:

Mccarran-Ferguson Act of 1945

Financial & Investment Dictionary: Mccarran-Ferguson Act of 1945

"Federal law in which Congress declared that the states will continue to regulate the insurance business. As a result, insurers are granted a limited exemption to federal antitrust legislation."

http://www.answers.com/topic/mccarran-ferguson-act-of-1945-1

"The McCarran-Ferguson Act, 15 U.S.C. § 1011, is a United States federal law that allows state law to regulate the business of insurance without federal government interference. The McCarran-Ferguson Act was passed by Congress in 1945 after the Supreme Court ruled in United States v. South-Eastern Underwriters Association that the federal government could regulate insurance companies under the authority of the Commerce Clause in the U.S. Constitution.

The Act was sponsored by Senators Pat McCarran (D-NV) and Homer Ferguson (R-MI)."

http://en.wikipedia.org/wiki/McCarran-Ferguson_Act

[Whisp]

46. thanks so much!

I would have googled but as I said upthread, my comp is a cranky old thing just like its owner.

sooooo. the powers of regulation was passed from the Feds to the individual states.

That means there's 51 assholes responsible instead of just one. I know that simplifying things to the extreme but each state was given the power to regulate and control the insurance industry so it would be effective and useful for the population, but they took bribes instead.

[RKP5637]

47. "but they took bribes instead." ... Yep, that's what I think too! And it was contagious. n/t

[Whisp]

49. it chaps my ass when the media has people on criticizing how 'corrupt' other

goverments are.

ha!I bet the U.S. and other western countries are trillions of dollars ahead in corruption cash, than some possible dictator somewhere on another continent (that is secretly buying illegal arms from these very same western warmongers that speak with those halos hovering over their rotten festered brain holders while yelling 'we're no. 1!' )

[RKP5637]

51. Same here... it really irks me when the media and others wrap themselves ...

in the flag and proceed to act like somehow we are superior to every other country and culture. It is a crock of BS! Well put, "... western warmongers that speak with those halos hovering over their rotten festered brain holders while yelling 'we're no. 1!"

[Whisp]

14. so has this been officially announced yet?

seems so by the time/date given.
I didn't click on link as my comp doesn't like some sites and freezes up.

haven't heard anything on CNN, unless I missed it or unless THEY missed reporting it on purpose

[clear eye]

15. Oh, oh, oh, oh, my!

The start of actually regulating these SOB's. I'm calling Schumer's office to thank him. And my other Senator to get her on board when the legislation makes it to the floor. No amending this one away.

[quiet.american]

19. Wow - I didn't think they'd actually do it, and do it so quickly! Kudos. nt

[Barack_America]

I honestly thought this was just a threat.

Who knows, maybe it still is, but I hope it isn't.

[clear eye]

29. I don't think it's actually done yet. The OP is a little misleading.

I believe that means that it will be in the legislation when it comes to the Senate floor. It can still be amended away, so call your Senators in support.

[90-percent]

20. Amazing

I only learned of this health ins anti trust exemption a few weeks ago, watching Dylan Ratigan links here on DU.

Is it really this easy? Can the Senate do this in a matter of weeks and days, not months and years? This seems to me to be almost as much of a Godsend as the public option itself.

If I was an insurance sociopathic fat cat spending $1.4 million a day to make the government rule in my interests at the expense of the people, I'd be upping that to 2.4 mil a day to make sure the anti trust exemption remains intact. After all, it is at the root of why these greedy bastards make all of their unearned no value added money to begin with.

Seems way too good to be true, but, dammit, I'll take it!

-90% Jimmy

[V_Byl]

33. ...Is it really this easy?

I'm sure it's easy to strip it away, it's another game to prosecute these companies under Anti Trust laws.

Not sure if anyone has ever heard of 'coordination of benefits' but I would think something like this is an example of these companies cooperating to screw over their customers (for all I know this could actually be set up by law, so this is speculative).

I got divorced years back and we each had to carry health insurance on my son. So, two sets of premiums paid to two different insurance companies. You have to disclose to each insurance company that you have more than one policy, and your co-pay's are set by whoever has the first birthday of they year. So, her co-pay for an office visit was $30, and mine was $5, so we had to pay $30 every time we went - the other (mine) insurance company doesn't pick up a dime there.

In fact the only time my insurance would kick in, was when her deductible wasn't satisfied. So for example she had a $2500/yr deductible on a procedure, and my insurance had a $2000/yr deductible, if we had a procedure done that cost $10,000 on our son - her insurance company would pay everything over the $2500.00 deductible, and mine would pay the $500.00 difference - leaving us with a bill for $2000.00. Yet both companies collected FULL premiums from our employers - I mean, seriously, what a joke.

Who knows, that's probably not covered under Anti-Trust - but it still pisses me off :)

[inna]

42. Same thing here,

I first learned about this ridiculous exemption a few weeks ago, on Dylan Ratigan show.

[cbayer]

23. It is about time. K & R. nt.

[inna]

24. Great news! But in practical terms, what are the actual implications?

[GodlessBiker]

27. The companies can't have meetings to discuss fixing premiums and denying coverage.

[Whisp]

32. they can just do it over the phone then?

sorry, but I'm starting to think you can't stop these people from consulting with each other on prices no matter what is done..

can someone help me out here? How can this be policed?
How effective is this for other corporations that are Not exempt?

[GodlessBiker]

55. I represented someone who was charged with price fixing in the matzoh business.

Wiretaps are worn, investigations are made....it can be done, if prosecutors want to go after it.

[GodlessBiker]

25. It's about freakin' time! It's ridiculous to talk about competition while they are exempt.

[Beetwasher]

28. HOT DAMN!!

:woohoo:

[rhett o rick]

30. Yikes, I recommended another cali thread. Will have to be more careful. But seriously, what will it

take to end this favored status? Legislation? If so, is any in the works?

[optimator]

36. suuuuuuurrrreeee they are

just like they are gonna be real tough on regulating wall street

[cali]

38. this, I think, will actually happen.

there's pretty strong support for it, and Leahy has been introducing such legislation for years. this isn't exactly a spur of the moment move.

[bridgit]

40. Fucking Good! Then work it round to the blood sucking derivative/investor class bullshit...

[gratuitous]

41. Has Lamar Alexander been notified?

Tennessee Senator Lamar Alexander was quoted yesterday as saying that the Obama administration shouldn't go down the dark path blazed by Nixon in creating an enemies list, and specifically mentioned the possibility that the insurance industry could lose its anti-trust exemption as an example of the Obama administration's alleged animus.

I'm sure that Mr. Alexander will put the kibosh on this! Why shouldn't insurance companies be able to collude to screw over their policyholders? After all, they're in business to collect premiums, not pay claims.

[bridgit]

43. hahaha, you gotta love GOP duplicity - Alexander is a liar, he still reveres Nixon himself

[RKP5637]

52. The perfect business model! n/t

[Scarsdale Vibe]

48. It's going to be offered as an amendment, so passage is not certain.

Probably have some "Democrats" vote against it, but might get some Republican crossover as well. Will be an early test of where loyalties lie.

[Wizard777]

50. They should also require them to prove they can pay off simultaneous claims to every policy.

The Katrina like Nightmare Scenario manifests. Every single policy holder submits the maximum claim on the same day. If they can't pay they are a ponzi scheme and the executives should be in the cells next to Madoff's.