Dems Try to Put Clamps on Health Insurers

(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.

[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.

[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.

[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.