Prognosis Negative For Congressional Repeal Of Antitrust Exemption For Health Insurers

Although the fate of Obamacare in the Supreme Court is still an open question, the prognosis is decidedly negative for the congressional effort to repeal the McCarran-Ferguson antitrust exemption for health insurers.

Although the Republican-controlled U.S. House of Representatives has passed a bill that would repeal the antitrust exemption for health insurers, the bill is not likely to pass the Democratic-controlled Senate.

The repeal of the antitrust exemption enjoyed by health insurers was included in the Protecting Access to Healthcare Act (the “PATH Act”), which was drafted by opponents of President Obama’s healthcare overhaul to repeal parts of that law.  The PATH Act recently passed the House (H.R. 5), largely along party lines.

As originally drafted, the amendment repealing the antitrust exemption would have applied broadly across the insurance industry.  However, the amendment was revised to keep the antitrust exemption for life insurance, annuities, property and casualty insurance, and other types of insurance other than health insurance.

Representative Paul Gosar (R-Arizona) sponsored the repeal amendment, stating that the measure was necessary “so that we can empower health insurance companies to compete more aggressively.”  On the other hand, Gosar also emphasized that the amendment would preclude class action lawsuits against health insurers, leaving antitrust enforcement to government authorities.

Representative John Conyers (D-Michigan) expressed the view of many Democrats by noting that the class action bar “effectively destroyed” the repeal.  Implicit in his statement was the acknowledgment that private actions play a major role in enforcement of the antitrust laws.

In the end, though, none of this is likely to amount to much more than political posturing in an election year.  The PATH Act is not likely to be passed by the Senate.  Not only are Senate Democrats unlikely to support the PATH Act, but President Obama has threatened to veto the bill if it makes it to his desk.