Wednesday, October 21, 2009

Move To Dump Insurers From Anititrust Exemption Gains

The House Judiciary Committee Wednesday voted 20-9 to remove federal antitrust exemptions the health insurance industry has enjoyed since the 1940s. Majority leader Harry Reid said a companion bill will be voted on soon in the Senate.

Finally the Democrats in Congress have showed some spunk. If the final bill is signed by President Barack Obama, the nation's insurers would be liable for certain antitrust violations including price fixing.

In the Beltway, the proposed legislation is considered punishing the industry for what many consider an erroneous report by the industry that the current health reform bills now offered in Congress would increase premiums.

I consider it leveling the playing field for the consumer by forcing the industry to become more competitive, especially if a public option is not included in the final health reform bill.

Republicans will look silly opposing the antitrust provision. Health insurance and Major League Baseball are the only two industries exempt from the law.

For those of you with an insatiable thirst for Beltway politics, read this posting on the issue by The Hill newspaper.

Another reason Democrats are showing some backbone is a growing sentiment of public support for if not a public option at least some way to force health insurers to be more responsive to consumer demands. Those feelings were suggested in the latest Washington Post/ABC News poll crunching the numbers in the divide between Democrats, Republicans and Independents.

Harold Meyerson, a Washington Post columnist, destroys the myth that the insurance industry is champion of the free market system.

In more than 30 states, five or fewer health insurance companies control three-quarters of the market (in Alabama, one company controls 90 percent). And mergers among health insurers are at an all-time high this year, the Wall Street Journal reported Tuesday. Worse yet, more and more businesses are declining to offer health insurance to employees (60 percent offered benefits this year, down from 69 percent in 2000 and 63 percent last year, according to an annual Kaiser Family Foundation study). Increasingly, individuals will have to shop for insurance in markets that are steadily less competitive.

President Obama and congressional liberals believe that one way to help Americans get the best deal for health coverage is to establish insurance exchanges where consumers can compare plans online. They further believe that merely establishing an exchange in an oligopolistic market isn't enough; the way to ensure true competition is to create a public option concerned less with preserving an industry-wide profit margin than with offering Americans a better deal.

Concludes Meyerson:

The market champions here are the president, liberals in Congress and the American public. Advocates for socialism? More like advocates for shoppers.

Another cost savings approach is to force all the states to allow its residents to purchase health insurance from out-of-state carriers. As it stands now, each state has its own insurance commission and sets the rules of what carriers must provide. The commissions' rules reflect each state's pet projects its legislators demand. Carriers which don't care to bother meeting any given state's standards simply stay out of the loop.

The result is lack of competition and promotion of insurance cartel oligarchy.

If the Democrats really are serious about lowering costs, then they must demonstrate they have the cojones to take on the trial lawyers lobby and set a cap on malpractice awards. With tort reform in this area, doctors no longer would order redundant tests on patients simply to cover their asses when a surgical or drug procedure goes haywire.

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