Congressman Thompson Votes for Fair Competition in Health Care
February 24, 2010
WASHINGTON - Today, Congressman Mike Thompson (D-CA) voted to help lower health insurance costs by ending health insurers’ exemption from federal antitrust laws. The Health Insurance Industry Fair Competition Act, H.R. 4626, would subject health insurance companies to federal antitrust laws, holding them to the same standards as everyone else.
“We need to bring down the cost of health care and make quality health care accessible to more people. By eliminating this exemption, it will make it more difficult for health insurance companies to avoid competition,” said Congressman Thompson. “And increased competition will benefit consumers. Recent rate hikes in California by Anthem Blue Cross Blue Shield underscore the need for health insurance reform. It’s absurd that consumers will face up to 39 percent increases in their rates, and we must do all we can to make sure that there is fair regulation of the health insurance market. This bill is a good step forward in the health reform process.”
Since 1945 health insurance companies have been exempt from all federal antitrust laws. According to a recent study by the American Medical Association, there have been more than 400 mergers among health insurers in the past 14 years. As a result, in 94 percent of the metropolitan areas in the U.S., the health insurance markets are now “highly concentrated,” according to long-established antitrust standards, and lack meaningful competition.
Under the bill, health insurers will no longer be shielded from legal accountability for price fixing, bid-rigging, unfair division of market territories, and other anti-competitive practices. This Act will also allow the U.S. Department of Justice and the Federal Trade Commission to investigate any suspicion of collusion and hold the insurance companies accountable.
While this bill removes the antitrust exemption, it does not change any state-based systems of regulation or taxation. This legislation will hold health insurers subject to both federal antitrust law and state regulations, and will force insurance companies into increased competition with one another and move the United States toward a fair and affordable health insurance market. The bill now heads to the Senate for consideration.
