AHIP Statement on H.R. 4626

Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today on H.R. 4626

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Real reform means containing costs to ensure that health care is affordable for working families and small businesses. It’s time to clear the political hurdles that stand in the way of real cost containment.

Washington, DC (Vocus) February 25, 2010

Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today on H.R. 4626:

“In attempting to solve a problem that doesn’t exist, this legislation is the triumph of sound bites over substance. The Congressional Budget Office has said that passage of this legislation will do nothing to reduce health care costs. Moreover, according to the National Association of Insurance Commissioners, anti-competitive ‘activities are not permitted under the McCarran-Ferguson Act and are not tolerated under state law.’ Real reform means containing costs to ensure that health care is affordable for working families and small businesses. It’s time to clear the political hurdles that stand in the way of real cost containment.”

Additional information on the McCarran Ferguson Act

New AHIP Letter: Last week, AHIP sent a letter to Capitol Hill, which states: “The claim that McCarran-Ferguson allows insurers to engage in practices such as price fixing, market allocation, and bid rigging is incorrect and the types of activities the legislation proposes to address already are subject to federal and state antitrust laws.”

National Association of Insurance Commissioners letter (10/21/2009): “The potential for bid rigging, price fixing and market allocation is of great concern to state insurance regulators and we share your view that such practices are harmful to consumers and cannot be tolerated. However, we want to assure you that these activities are not permitted under the McCarran-Ferguson Act and are not tolerated under state law. Indeed, state insurance regulators actively enforce prohibitions in these areas.”

Congressional Budget Office analysis (10/29/09): “The analysis also takes into account the provisions of section 262 of Division A regarding the application of federal antitrust laws to health insurers. CBO estimates that implementing those provisions would have no significant effects on either the federal budget or the premiums that private insurers charged for health insurance.”

Congressional Research Service analysis (8/31/2009): “Given the courts’ narrowing definition of the ‘business of insurance,’ they would not be likely, in any event, to find such activities as market allocation, tying, or monopolization protected by McCarran-Ferguson from the application of the antitrust laws.”

What Others Are Saying About McCarran-Ferguson:

Los Angeles Times: “Lawmakers are expected to pass a bill this week that would repeal the federal antitrust exemption that insurance companies have enjoyed since 1945 -- a move that makes for little more than a good sound bite…Removing the exemption won't do much to boost competition or spark a price war among insurers, however. (The Congressional Budget Office said that a similar proposal in the House's comprehensive healthcare bill would have no significant effect on premiums because state regulators already require insurers to price their coverage competitively.)” (Los Angeles Times, Back to the drawing board, 02/08/2010)

Paul Ginsburg, Center for Studying Health System Change: “‘I don't think this will have much effect. This is strictly political posturing.’…In fact, Ginsburg said, insurers already are prohibited from colluding to raise prices and from merging at will. They can, however, pool information about risks, and it can be argued that that helps them manage ways of controlling costs and even rates.” (McClatchy, Analysts: Stripping health insurers' antitrust protection won't affect consumers much, 02/07/2010)

Kaiser Health News: “…many antitrust experts say that ending the exemption -- by repealing the 1945 McCarran-Ferguson Act -- wouldn't significantly increase competition or reduce premiums.” (Kaiser Health News, The Antitrust Exemption For Health Insurers: Meaningful Or Not?, 02/08/2010)
Scott Harrington: “It might sound good, but I can think of very few things in the bill that would be
less consequential for consumers of health insurance.” (Kaiser Health News, The Antitrust Exemption For Health Insurers: Meaningful Or Not?, 02/08/2010)

CQ: “…bill supporters have little evidence to support claims that the antitrust exemption leads to higher costs. In fact, their statements in support of the bill sometimes suggest the opposite.” (CQ, House Democrats Push Bill to Eliminate Insurance Antitrust Exemption, 02/05/2010)

Ezra Klein: “On the other hand, since it doesn't matter much, and it's good politics either way, Democrats may as well go after it. They just shouldn't fool themselves into thinking they've actually done anything useful when they've finished.” (The Washington Post, Ezra Klein, A primer on the antitrust exemption for insurers, 02/08/2010)

Contact:
Robert Zirkelbach
202-778-8493

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