Lost in all my other posts on the 1st Congressional District race this week was the fact that the House voted overwhelmingly to pass, 406-19, the Health Insurance Industry Fair Competition Act. Can’t get more bi-partisan that that!
So what is the Health Insurance Industry Fair Competition Act all about? It once and for all repeals the antitrust exemption health insurance companies have held since 1945. You may wonder, “Why the heck did they have an antitrust exemption in the first place?” In 1945, antitrust law was much different. It was actually illegal for insurance companies to share any sort of information, including historical loss data that could be used by small insurance companies to share risk and set appropriate premium rates. To accommodate this, Congress decided to give a full exemption to the industry. In retrospect, a very narrow exception would have done the trick. Under current antitrust law, this sort of sharing of information is considered legal.
In a press release issued by Congressman Periello (D-Va.) and Congresswoman Betsy Markey (D-Colo.), who introduced this bill, they noted that since 1945 health insurance companies have enjoyed protections “from liability for antitrust practices like price fixing, dividing up market territories or bid rigging.”
As Rep. Periello explained
Today, Washington finally took a stand for patients, for the free market, and for common-sense, bipartisan principles of fairness. Today, we sent a simple message: health insurance companies must compete for business like everyone else…Working middle-class families are sick and tired of getting nickel and dimed by these companies while they rack up billions in profit and enjoy their monopoly protection…
I can’t say enough good things about the job that Rep. Periello is doing on behalf of his district, Virginia and the country. This guy gets it!
As Rep. Eddie Bernice Johnson (D-Texas) notes in the Hill,
Profits for the ten largest insurance companies rose 250 percent between 2000 and 2009 — ten times faster than inflation. In the last 14 years, there have been 400 mergers in the health insurance industry, and in most states, one or two insurers dominate the market.
How these sort of anti-competitive practices were allowed to go on for as long as they did is truly amazing! I hope that the Senate follows through and passes this immediately. It’s high time that consumers are protected against such practices.
Want a lesson in leadership? Check out Rep. Periello’s urging of the passage of the bill, which he authored, on the House floor: