Dems Try to Put Clamps on Health Insurers

Effort to Strip Industry of Antitrust Exemption Part of Increasingly Tense Struggle over Landmark Health Care Legislation

(AP)  Democrats launched a drive at both ends of the Capitol on Wednesday to strip the insurance industry of its decades-old exemption from federal antitrust laws, part of an increasingly bare-knuckled struggle over landmark health care legislation sought by President Barack Obama.

If enacted, the change would put an end to "price-fixing, bid-rigging and market allocation in the health and medical malpractice" insurance areas, said Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee. Leahy said he would seek a vote on the plan when the Senate debates health care legislation in the next few weeks.

Leahy made his comments at virtually the same time the House Judiciary Committee voted 20-9 to end an industry exemption that dates to 1945. Three Republicans supported the move.

CBSNews.com Special Report: Health Care

Senior Democratic officials in the House said the leadership was inclined to incorporate the measure into the broader health care bill expected to be brought to the floor for a vote within a few weeks. No final decision has been made, they added.

The events coincided with a vote in the Senate to sidetrack legislation averting a 21 percent cut in Medicare payments for doctors in January and raising their fees by $247 billion over a decade. The 47-53 vote was 13 short of the 60 needed to advance the bill, reflecting concerns that the measure would have raised deficits. The result was a defeat for Democrats and an embarrassment for the American Medical Association, which had mounted a seven-figure advertising effort to assure passage of one of its top priorities.

Republicans grumbled that Senate Democrats timed the offensive on antitrust matters to obscure their defeat on the bill setting pay rates for doctors, a measure that GOP leader Mitch McConnell, R-Ky., called "the Senate's first vote on health care this year."

Even so, taken together, the threats to revoke long-standing antitrust protections reflect the fury Democrats have projected in response to recent insurance industry attempts to influence the shape of legislation. The events occurred less than a week after the insurers' trade association issued a report saying a measure in the Senate Finance Committee would produce sharp increases in premiums for millions of people who currently have insurance.

Democrats and the White House reacted angrily, attacking the study as flawed and politically motivated.

Responding to the day's developments, the industry said the legislation was based on a misperception of existing law. "We believe that health insurers have not been engaging in anticompetitive conduct and that McCarran-Ferguson does not provide a shield for such conduct," Karen Ignagni, president and CEO of American's Health Insurance Plans wrote to Rep. John Conyers, the Michigan Democrat who chairs the Houses Judiciary Committee.

"Thus, the bills attempt to remedy a problem that does not exist," she wrote. The industry holds a large conference beginning on Thursday several blocks from the Capitol.

The White House had no reaction. Instead, aides pointed to Obama's statement last weekend that insurers are earning "profits and bonuses while enjoying a privileged exception from our antitrust laws, a matter that Congress is rightfully reviewing."

The developments came as Democrats struggled in both houses of Congress to enact Obama's call for legislation to expand health care to millions who lack insurance, provide greater consumer protections to millions more, and rein in the cost of medical care in general.

In the Senate, Reid, key committee chairmen and White House aides are at work crafting legislation the Senate can vote on later this fall.

The House is also on track for a vote this fall, although weeks of private negotiations among Democrats have yet to produce agreement on a bill.

Among the most controversial unresolved issues concerns proposals for the government to sell insurance in competition with private companies.

The House bill is certain to include such a provision, although the rank and file have yet to come to an agreement on key details, slowing action on the overall measure.

It is unclear what type of so-called "public option" will be incorporated into the Senate measure, where Democratic moderates are wary of the idea, even though public polling consistently shows its popularity.

Until recently, the insurance industry has played a noncommittal role as legislative proposals developed in both houses of Congress. AHIP announced months ago it supported comprehensive health care reform and Obama called on Ignagni to speak at a televised White House event designed to showcase widespread agreement that the time had come to change the current system.

Essentially, industry offered a trade. It agreed to abandon practices such as denying coverage on the basis of pre-existing medical conditions if the legislation required nearly universal coverage, a step that would give it access to millions of new customers. At the same time, it vigorously opposes any legislation that would allow the government to sell insurance.

The tone began to change when the Finance Committee voted to excuse an estimated two million lower income Americans from a requirement to purchase insurance, at the same time it greatly reduced the penalties for those who were still covered, but refused to buy coverage.

[endurorob_5]

Although I appose antitrust exemption for any industry this is just another indication of the vindictivness of the dems and the Obama administration. These people are very close to evil.

[quapawsix]

Republicans grumbled that Senate Democrats timed the offensive on antitrust matters to obscure their defeat on the bill setting pay rates for doctors,
And the Republican's wouldn't have done the same?
Enough of the finger pointing Washington do the right thing take care of WE THE PEOPLE.

[timdgrim]

Everybody cancel all insurance policies, and then they'll change their tune. People have the power, they just don't use it.

[stopoil]

The similarity is enough to make you ill. The Health Insurance Industry is as outrageous as the Bank and Wall Street industry. We are their cash cow. MOOOOOOOO
And some Americans don't understand why they insurance industry is spending millions in lobbyists against the public option.
If the Canadian, English, French.... systems were so bad don't you think those citizens would be fighting for change? They love it. The public option is a minimum.
Now America 1 + 1 = 2, 2 + 2 = 4 .........

[babooph]

All those bribes to protect the crooks with anti trust exemption have been spent-new lobbyist funds are coming though....

[tmittelstaed]

"...We need to stop using insurance for smaller simple things..."

This is absolute rubbish. My employer's company has cut insurance back to a 10K deductible (yes, that's right, NO payments AT ALL for any bills under 10K) and the cost of this insurance to my employer is still rediculous - and it has been jacked up every year almost 20%. Years ago my employer used to have a lot better coverage. Today the coverage is essentially there to keep employees from losing their homes in the event someone goes to the hospital. Tomorrow - who knows? Maybe we won't have coverage at all.

Yes, there's some people with really nice health plans that use it for the common cold. If the insurance company is willing to give them such coverage for really cheap rates, then that's their insurers problem if their insurer doesn't make any money. But if you know of anyone like this, please post who their insurer is, because every other insurance company I've heard about doesn't operate this way.

[sjc_1]

You describe what will happen to more people if nothing is done. Higher premiums, higher deductibles, more co payments, much higher premiums every year and all the rest have happened over the decades and will continue in that direction with private only health care. Fewer employers will be willing to pay the continuously increasing premiums and will just not offer health insurance, so the number of uninsured people will continue to rise.

[melchg07]

Here is an EXCELLENT article which really gets at the core of the problem.

http://american.com/archive/2009/may-2009/what-is-driving-rising-healthcare-costs


I fully support insurance reform and making sure that the insuance industry is competitive, however its gonna take A LOT more to get costs down and this article explains it pretty well.

We need to stop using insurance for smaller simple things and force competition among hospitals to compete to give better pricing on more simple things....such as getting a check up for something like a common cold. We need to first and foremost need to be smarter consumers.

[kevjustice]

The Dems need to change the wording of their message. Specifically, they need to stop saying the words "government or public option" and use the words "medicare for all". Because of the influence of corporate america the former has negative connotations for some people while the latter has more good connotations. Simple wording that people can understand can make a world of differance.

[melchg07]

Any insurance company which holds more than 40% of the market share in an individual state should be broken up.

[jschmidt27]

suppossing they have the best price- that's why they're the biggest. Not all companies get big by taking over other companies. You have to look at the total picture. Just allow competition actoss state lines.

[slownewsday_5]

competition across state lines sounds fine until you attempt to sue your insurance provider halfway across the nation.

[slownewsday_5]

and I am not endorsing just suing them for any reason - but you should reserve the right to if needed. And if they are in a distant state, it could be very cost prohibitive for you to do so.

[jschmidt27]

In the public option will you be able to sue? I doubt it. Medicare turn down rate is higher than private insurers. So in a public option you;ll have an insurer in DC. Try to get customer service out of them. What has the govt run efficiently- postal service, medicare, social security- no all losing big money. We cannot afford this. Our dollar is turning to junk because of the all the spending so far.

[slownewsday_5]

So don't take the public option, schmitty. Easy enough. That is unless you can't tell the difference between an option and gov't-run healthcare.

[slownewsday_5]

And honestly, schmitty, the dollar started turning to junk when we were taken off the gold standard, long ago.

[jschmidt27]

So first the govt says there is not enough competition. Than the govt says they should be broken up. Will that create more competition? No it is the fact that companies can;t compete across state lines that prevents it. We don;t have to create a public option to insure competition. We need to allow companies to compete across state lines. Humana, a large insurer, makes 2% profit. Average insurer makes 2-4% profit. The Congress is forcing this public option to get us on the slippery slope to a single payer system. That will ruin the good innovation we have in this country. Single payer systems lead to low doctor pay and hospitals losing money in every country. The Swiss system uses private insurers but control costs. Much better.

[slownewsday_5]

2% to 4% profit???

You apparently aren't familiar with creative accounting. Anyone with a decent accountant pays them to find every write-off possible. The insurance companies find a way to write off all of their lobbying dollars, for sure, on top of every other loophole they can exploit - they can afford the best accountants.

Personally, I write off everything possible, too. The point is that you have been had if you believe they only have 2% to 4% profit margins.

I agree with you re: the Swiss plan, though. We'd need to make it uniquely ours. It's very heavily regulated, but a good start. It requires that the insurance companies offer a not-for-profit basic plan; they are allowed to make profit on the upsells, like plans which give you private rooms if hospitalized, etc.

[jschmidt27]

slownew- take it up with the Federal Accounting Board. They control the accounting standards. If you think the 2-4% reported by the insurers is false then the 20-40% profits enjoyed by tech companies would be outrageous. Competition across state lines is the best method. The public option cost too much is unnecessary and will destroy the good parts of our current system.

[slownewsday_5]

I don't have to take it up with anyone, schmitty - I understand the practice, and they definitely downplay their profit margins in order to avoid taxes. Why not? I do.

[jschmidt27]

slownews- show me the audit that you;ve done on the insurers? Make a statement accusing them of fraud, back it up.

[slownewsday_5]

Why, schmitty? I haven't audited them - I just know what's common practice. And it IS common practice. Didn't you say you run a business? You should know, in that case, and should know that as you get into bigger and bigger companies that creative accounting is completely the norm.

Creative accounting ISN'T fraud, either. Misleading, sure, but not illegal.

[lami987]

It is also time for government to break up those too-big-to-fail companies and allow more competition in the market place. Allowing Public Option in our health insurance choices will be a good start.

[doc_holliday76]

Democrats launched a drive at both ends of the Capitol on Wednesday to strip the insurance industry of its decades-old exemption from federal antitrust laws,

If enacted, the change would put an end to "price-fixing, bid-rigging and market allocation in the health and medical malpractice" insurance areas,
---------------------------------------






ANY congresscritter voting against ending this insane repeal of the anti-trust laws giving the for-profit insurance companies the right to screw middle class Americans through collusion and price-fixing, should be immediately hung outside the Capital.

[PVperson2]

It doesn't matter if this is good for America or not, the GOP will be against it as usual.

[au_fait]

Why don't we start limiting frivalous lawsuits. Oh yea, the legistlators are lawyers. Just another bunch a crap from our leaders and I use that term losely!

[sjc_1]

Courts will throw out law suits that have no merit. The term implies that most law suits that some do not like are without merit, this is not always the case.

[lami987]

Frivalous lawsuits will almost disappear if doctors and hospitals can eliminate or at least greatly reduce mistakes they make. Some doctors couldn't even write legible prescriptions inspite of years of training. And do not forget some medical schools are partly funded by tax payers.

[tmittelstaed]

It isn't the mistakes, studies which have been leaked have shown that the vast majority of malpractice awards are to repeat offenders. The problem is most malpractice suits get settled out of court where all parties are placed under a gag order. The doctoring crowd is supposed to internally police themselves but their track record is as bad as internal affairs departments at police departments.

All that limiting medical lawsuits would do is remove the small incentive that exists now to police doctors. Today, a doctor that routinely makes mistakes gets higher and higher malpractice insurance rates. You limit lawsuits and that same doctor will no longer see rate increases.

The other problem limits do is shift the cost of care to the taxpayers. Right now if someone gets permanently disabled under a doctors mistake then 3-4 mil is paid out, which will pay for their care for the rest of their life. If you limit those awards, then the disabled person gets a miserable 200K and burns through that in a year, then goes indigent and becomes a ward of the state for the rest of their lives, and us taxpayers pay for them.

medical tort reform is needed about as much as a hole in the head.

[slownewsday_5]

Well, this seems to be a move which both sides have been calling for.

Can't wait to see who will be the naysayers, other than the insurance companies themselves...


.

[PVperson2]

I'll give you 5 to 1 odds that the GOP will pan it and work to stop it.

[bc-1948]

Can anyone explain why they were exempt from anti-trust laws in the first place? Unbelieveable....

[sjc_1]

They were exempt from SOME anti trust laws, not all of them. This has been one area where Congress has thought about changing the laws, but up until now has not.

[rightbehind]

You go Democrats!

[us_1776]

There is nothing that can do anything to control the greedy private healthcare insurance companies except the PUBLIC OPTION.

The PUBLIC OPTION is the only "hammer" that stands any chance of keeping these greedy private healthcare insurance companies honest.

[stuart-johns2]

This is long overdue.

From the article:

"The focus on the industry's antitrust exemption, it said, was "a political ploy designed to distract attention away from the real issue of rising health care costs."

Really? I thought the industry's exemption was one of the big reasons for run-away costs?

Do these guys ever listen to what they say? Ya think they even care?

[stn_sage]

Well...you know better...THEY don't care!

They'll rape the economic system, then burn it, as long as they get out of it what THEY want...that's ALL they care about!

[pnut134]

Now to get rid of Worker's Compensation. That was a gift to the Ins Co's. and does nothing. It's only purpose is to provide duplicate medical coverage.

[BeckieBest]

This is good.

Insurance companies are raping the American people.

[sjc_1]

"..federal government to sell insurance in direct..."

Ted Kennedy and others got Direct Student Loans passed because banks were making $10 billion profits per year on no risk student loans that were backed by the government. They could not lose and only gain, but they managed to get their banks in trouble with sub prime mortgages anyway. Why should the government take all the risks and the private sector take all the profits? That only makes sense to the people taking the profits, great deal if you can get it.