The law, the McCarran-Ferguson Act, is often cited by Mr. Reid and other critics of the health insurance industry as a reason why coverage can be so expensive for many people. They say the law allows insurers to monopolize markets and fix prices in ways that are usually illegal.
"Since 1945, the insurance industry has enjoyed exemption from federal antitrust laws because of the McCarran-Ferguson Act," Mr. Reid said. "Pat McCarran, who was the senior senator from Nevada at the time, lent his name to this piece of legislation. Although we're both Nevadans, I'm not sure what Pat McCarran had in mind when he pushed this bill. And if Pat were around today, he couldn't be happy with the state of the insurance industry."
"Providing an exemption for insurance companies to antitrust laws has been anticompetitive and damaging to the American economy," Mr. Reid continued. "Health insurance premiums have continued to rise at a rapid rate, forcing businesses to cut back on health insurance coverage and forcing many families to choose between health insurance and basic necessities."He added: "Insurance companies have become so large they dominate entire regions of the country. They have become so powerful they block start-up businesses from entering the market, and they put smaller companies out of business. They have become so dominant that they dictate business practices. They are so influential that they exert tremendous influence over public policy."
This is supposed to be payback for that report saying that premiums were going up under the Baucus bill. Good luck with that. As I understand it, one of the prime causes of excess concentration in the health insurance market is state level regulation, not some sort of price fixing agreement. When the regulations make compliance too expensive, or make it hard to operate at a profit, the companies with the smaller client bases exit the market, especially if they have sister companies outside the state.
In principal, I'm in favor of anti-collusion laws, though in practice, anti-trust cases are more often a weapon used to quell competition, rather than an actual benign force in the market, and by the time the case has wrapped up, they're usually moot. (See, AT&T, IBM, Microsoft). And I certainly don't see why insurance companies should have an exemption from whatever laws we do have. But it's hard to escape noticing that this basically amounts to political extortion, which is not the way our laws should be used.
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