Viewing entries tagged with 'WYNTK'
What You Need to Know: McCarran-Ferguson Act
Posted by The Campaign on February 03, 2010 at 9:15 AM
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.”
To read the full letter, click here.
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. For an analysis of a similar proposal, see CBO’s cost estimate for H.R. 3596, the Health Insurance Industry Antitrust Enforcement Act of 2009 (October 23, 2009).”
To read the full analysis, click here.
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.”
American Academy of Actuaries letter (1/21/10):
“These analyses of aggregated data serve several purposes; those purposes align with the original intent of the McCarran-Ferguson Act and assist state regulators charged with overseeing the pricing of insurance coverage and solvency of insurers. A few of these purposes are:
1. To provide credible data upon which to base loss estimates and premium rates.
2. To enhance competition by providing access to industry information to enable existing companies to offer products in new markets or for different types of exposure by reducing the uncertainty associated with determining loss estimates and premium rates.
3. To further support competition by providing data to newly-formed companies or self-insurers looking to begin covering medical professional liability exposure.
4. To guide companies, self-insurers, and regulators in reducing the likelihood of insolvencies, a long-term and recent concern. Through the review of industry data, companies, self-insurers, and regulators are better able to evaluate whether too little is being charged or not enough is being set aside in reserves for a given exposure situation.”
To read the full letter, click here.
AHIP letter to Senator Leahy and Representative Conyers (10/8/09):
“In our view, the two bills under consideration may be based on a misperception of the scope and impact of the McCarran-Ferguson Act on health insurers. The Act does not preclude regulation of insurers, but, instead, recognizes that the states play a central role in conducting oversight of health and other insurers.”
To read the full letter, click here.
AHIP letter to Representative Conyers (10/21/09):
“The narrow nature of the Act, as interpreted by courts, means that the types of anticompetitive activity contemplated by the bills already are subject to federal and state antitrust laws. We believe that health insurers have not been engaging in anticompetitive conduct and that McCarran-Ferguson does not provide a shield for such conduct. Thus, the bills attempt to remedy a problem that does not exist.”
“We ask you to consider our strong concerns that such legal uncertainty could chill or limit newly developing activities that will benefit consumers and doctors (e.g., physician portals now developing to streamline administrative processes and data aggregation efforts that are designed to respond to physician concerns that they not be evaluated only through the lens of an individual health plan’s patient population) and add to the already substantial cost that litigation imposes on the health care system.”
To read the full letter, click here.
Scott Harrington op/ed (WSJ, “Competition and Health Insurance”, 11/6/09):
“Repealing the antitrust exemption for health insurers would not significantly increase competition, and it would not make health-insurance coverage either less expensive or more available. There is no evidence that the exemption has increased health insurers' prices or profits or contributed to higher market concentration.”
“In other words, the insurance industry's antitrust exemption is inconsequential to the health-care reform debate. It just distracts attention from important issues and further demonizes private health insurance.”
To read the full article, click here.
BNA article (“Bills to Repeal McCarran-Ferguson Act for Health, Malpractice Insurers Introduced”, 9/23/09):
“Attorneys who spoke to BNA said, however, there is no evidence that the act has been an impediment to either federal or private efforts to prevent or curtail anti-competitive conduct in these sectors.”
The article also quoted Jack A. Rovner, with The Health Law Consultancy in Chicago: “While the law does not have much impact on the health insurance industry, it makes a good political target,” he said. “This is more about politics than an effort to correct anti-competitive conduct by health insurers because the fact of the matter is that repeal would not make a significant difference with respect to either compliance or enforcement,” Rovner said. “McCarran-Ferguson has never been a valid defense to the price-fixing or other per se antitrust law violations targeted by the legislation, whether pursued by government or private parties,” he added. “While repeal could have a significant impact on the balance of state and federal relations, the proposed legislation will not change a lot in the legal landscape concerning the way health and malpractice insurers are regulated,” he said.
To read the full article, click here.
Business Week article (“Reviving an Old Threat in Health-Insurance Battle”, 10/19/09):
“’There would be quite a bit of confusion and legal action on the state and federal level as regulators try to figure out who's responsible for regulating what,’ says Joseph Paduda, principal of Health Strategy Associates, a managed-care consulting firm in Madison, Conn.”
“Austin Frakt, a health economist and assistant professor at Boston University's School of Public Health, says lawmakers also would have to take into account the other parties that contribute to driving up health-care costs—including doctors, hospitals, and drug companies—which McCarran-Ferguson does not address.”
“Threatening a repeal of McCarran-Ferguson ‘doesn't seem like it has been thoroughly thought through,’ says Frakt. As with every aspect of the proposed reform, the question of whether to regulate insurance at the federal or state level ‘requires a nuanced approach.’”
To read the full article, click here.
Health insurance is one of the most regulated industries in America at both the federal and the state level: http://bit.ly/PJuzm
