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Health Insurance Companies Lose Antitrust Exemption

(Image: jeffschwartz under CC 3.0)

Whether or not major healthcare reform passes this year, the health insurance industry will still see some changes. The House of Representatives recently voted to eliminate health insurance companies’ exemption from antitrust laws.

Health insurers have been exempt from such legislation since World War II (by 1945’s McCarran-Ferguson Act), when the market was mostly made up of regional nonprofit Blue Cross Blue Shield-type providers. Democrats contend that the loophole has allowed major medical health insurance providers to have regional monopolies. Indeed, there are many areas of the United States where a single health insurance company controls over 50% of the market. It’s very hard to promote competition in such an environment, where the health insurance cost tends to be high.

The bill passed by a margin of 406 to 19. Most representatives of both parties probably considered voting in the health insurance companies’ favor too difficult to justify politically. A handful of Republicans who opposed the bill on the grounds that it would have little impact were accused of being “wholly owned subsidiaries of the health insurance industry”. Democratic Rep. Anthony Weiner of New York’s comments were stricken from the official record.

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