This week, Senate Judiciary Committee Chairman, Patrick Leahy, introduced legislation ending the federal antitrust exemption for health and medical malpractice insurance under the McCarran-Ferguson Act of 1945 (15 U.S.C. § 1011 et seq.), which basically gives states, not the federal government, the authority to regulate the "business of insurance" unless a federal law specifically provides otherwise. See Leahy's Statement. In commenting on the bill, named the Health Insurance Industry Antitrust Enforcement Act, Senator Leahy said:
A few industries have used their influence to obtain a special, statutory exemption from the antitrust laws, and the insurance industry is one of them. In the markets for health insurance and medical malpractice insurance, patients and doctors are paying the price, as costs continue to increase at an alarming rate. Insurers should not object to being subject to the same antitrust laws as everyone else.
Many think that state regulation of the insurance industry in general is on the way out. See my discussion, Drift Toward Federal Regulation. The near failure last fall of AIG and severe weakness in the economy fuel speculation that federal regulation is not far off. See Insurance Federal Regulation Bill Touted as Answer to AIG-Sized Problems.
Nevertheless, Senator Leahy's bill may have more to do with health care reform than the demise of McCarran-Ferguson per se and may be intended to preempt challenges to any reform legislation, including tort reform, under McCarran-Ferguson.
Comments