House committee antitrust hearing includes McCarran-Ferguson comments

The U.S. House of Representatives Judiciary Committee's Courts and Competition Policy Subcommittee held a hearing to discuss antitrust laws and their effects on healthcare providers, insurers and patients. Witnesses included Richard Feinstein, director of the Federal Trade Commission's Bureau of Competition; Sharis Pozen, chief of staff and counsel to the assistant attorney general of the Antitrust Division; Arthur Lerner, there on behalf of America’s Health Insurance Plans; and David Balto, Senior Fellow with the Center for American Progress.

Feinstein mainly focused on health insurer concerns, stating, “The FTC has played, and will continue to play, an important role in protecting and promoting competition to lower costs and improve quality, and believes that continued effective antitrust enforcement is a necessary component of any plan to improve health care.”

Meanwhile, Pozen, of the U.S. Department of Justice, highlighted the impact of the McCarran-Ferguson Act during her testimony:

“When we discuss health care and antitrust, McCarran-Ferguson often enters the discussion, and it will here. The department supports efforts to bring more competition to the health insurance marketplace that lowers costs, expands choice and improves quality. In February, the House voted overwhelmingly, 406-19, in passing the Health Insurance Industry Fair Competition Act (H.R. 4626), to amend the McCarran-Ferguson Act to provide that nothing in the act shall modify, impair or supersede the operation of any of the antitrust laws with respect to the business of health insurance.”

Balto also presented comments on the McCarran Ferguson Act during his testimony when he brought up the need for clarification of the Federal Trade Commission (FTC) jurisdiction to bring enforcement action against health insurers:

“Some may suggest that the FTC lacks jurisdiction over health insurance. I urge this committee to ask the FTC to clarify its position on this issue. Is the claim of no jurisdiction the law or simply an urban legend? As I understand it, there is a limitation in Section 6 of the FTC Act that prevents the FTC from performing studies of the insurance industry without seeking prior congressional approval. This provision does not prevent the FTC from bringing either competition or consumer protection enforcement actions. There may be arguments that the McCarran-Ferguson Act limits jurisdiction, but that exemption is limited to rate making activity.”

The Automotive Service Association (ASA) advocates the repeal of the McCarran-Ferguson Act for all insurers. To view the panelists’ full testimony, visit ASA’s legislative website at www.TakingTheHill.com.