[Congressional Record Volume 166, Number 163 (Monday, September 21, 2020)]
[House]
[Pages H4571-H4573]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COMPETITIVE HEALTH INSURANCE REFORM ACT OF 2020
Ms. SCANLON. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 1418) to restore the application of the Federal antitrust
laws to the business of health insurance to protect competition and
consumers, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1418
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Competitive Health Insurance
Reform Act of 2020''.
SEC. 2. RESTORING THE APPLICATION OF ANTITRUST LAWS TO THE
BUSINESS OF HEALTH INSURANCE.
(a) Amendment to McCarran-Ferguson Act.--Section 3 of the
Act of March 9, 1945 (15 U.S.C. 1013), commonly known as the
McCarran-Ferguson Act, is amended by adding at the end the
following:
``(c)(1) Nothing contained in this Act shall modify,
impair, or supersede the operation of any of the antitrust
laws with respect to the business of health insurance
(including the business of dental insurance and limited-scope
dental benefits).
``(2) Paragraph (1) shall not apply with respect to making
a contract, or engaging in a combination or conspiracy--
``(A) to collect, compile, or disseminate historical loss
data;
``(B) to determine a loss development factor applicable to
historical loss data;
``(C) to perform actuarial services if such contract,
combination, or conspiracy does not involve a restraint of
trade; or
``(D) to develop or disseminate a standard insurance policy
form (including a standard addendum to an insurance policy
form and standard terminology in an insurance policy form) if
such contract, combination, or conspiracy is not to adhere to
such standard form or require adherence to such standard
form.
``(3) For purposes of this subsection--
``(A) the term `antitrust laws' has the meaning given it in
subsection (a) of the first section of the Clayton Act (15
U.S.C. 12), except that such term includes section 5 of the
Federal Trade Commission Act (15 U.S.C. 45) to the extent
that such section 5 applies to unfair methods of competition;
``(B) the term `business of health insurance (including the
business of dental insurance and limited-scope dental
benefits)' does not include--
``(i) the business of life insurance (including annuities);
or
``(ii) the business of property or casualty insurance,
including but not limited to--
``(I) any insurance or benefits defined as `excepted
benefits' under paragraph (1), subparagraph (B) or (C) of
paragraph (2), or
[[Page H4572]]
paragraph (3) of section 9832(c) of the Internal Revenue Code
of 1986 (26 U.S.C. 9832(c)) whether offered separately or in
combination with insurance or benefits described in paragraph
(2)(A) of such section; and
``(II) any other line of insurance that is classified as
property or casualty insurance under State law;
``(C) the term `historical loss data' means information
respecting claims paid, or reserves held for claims reported,
by any person engaged in the business of insurance; and
``(D) the term `loss development factor' means an
adjustment to be made to reserves held for losses incurred
for claims reported by any person engaged in the business of
insurance, for the purpose of bringing such reserves to an
ultimate paid basis.''.
(b) Related Provision.--For purposes of section 5 of the
Federal Trade Commission Act (15 U.S.C. 45) to the extent
such section applies to unfair methods of competition,
section 3(c) of the McCarran-Ferguson Act shall apply with
respect to the business of health insurance without regard to
whether such business is carried on for profit,
notwithstanding the definition of ``Corporation'' contained
in section 4 of the Federal Trade Commission Act.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Pennsylvania (Ms. Scanlon) and the gentleman from North Dakota (Mr.
Armstrong) each will control 20 minutes.
The Chair recognizes the gentlewoman from Pennsylvania.
General Leave
Ms. SCANLON. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and include
extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Pennsylvania?
There was no objection.
Ms. SCANLON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of H.R. 1418, the Competitive
Health Insurance Reform Act.
This commonsense legislation repeals a longstanding antitrust
exemption for the health insurance industry under the McCarran-Ferguson
Act. It does so for price-fixing, bid-rigging, and market allocation--
the most egregious kinds of anticompetitive conduct. There is
absolutely no justification for this broad antitrust exemption for the
business of health insurance.
Congress passed the McCarran-Ferguson Act in response to a 1944
Supreme Court decision finding that the antitrust laws applied to the
business of insurance. Both insurance companies and the States
expressed concern about that decision. Insurance companies worried that
it could jeopardize certain collective practices, like joint rate-
setting and the pooling of historical data, and the States were
concerned about losing their authority to regulate and tax the business
of insurance.
To address these issues, McCarran-Ferguson provides that Federal
antitrust laws apply to the business of insurance only to the extent
that it is not regulated by State law. Unfortunately, this resulted in
a broad antitrust exemption. Industry and State revenue concerns,
rather than the vital goals of protecting competition and consumers,
were the primary drivers of the act.
In passing McCarran-Ferguson, Congress initially intended to provide
only a temporary exemption and, unfortunately, gave little
consideration to competition concerns.
Not surprisingly, there is broad support for ending this safe harbor
for antitrust violations that are criminally illegal. As the Antitrust
Modernization Commission Report noted in 2007, the McCarran-Ferguson
exemption should be repealed because it has outlived any utility it may
have had and is among the most ill-conceived and egregious examples.
Furthermore, it is far from clear that the McCarran-Ferguson
antitrust exemption was ever justified in the first place. Antitrust
exemption should be exceedingly rare and should be enacted only where
there are strong policy reasons for such exemption.
Carving out an entire part of a healthcare system from the antitrust
laws should be unthinkable, particularly when healthcare costs are so
high for many families. That is why it is time to repeal the special
exemption for the insurance industry.
Mr. Speaker, I thank my colleague, Chairman DeFazio, for his
leadership on this important legislation. I urge my colleagues to
support this bill, which previously passed the House with an
overwhelming bipartisan vote of 416-7, and I reserve the balance of my
time.
Mr. ARMSTRONG. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, under current law, the health and dental insurance
industries are exempt from some Federal competition laws and related
enforcement actions.
Congress established this exemption in 1945 at a time when Federal
antitrust law was less developed and more likely to disrupt
procompetitive practices in the insurance industry under State laws.
H.R. 1418 would update antitrust law and apply it to the business of
health insurance in ways designed to better protect consumers. At the
same time, H.R. 1418 would still permit the health insurance industry
to engage in procompetitive collaboration that benefits customers.
Mr. Speaker, this bill represents another small step designed to
improve America's healthcare system. I encourage my colleagues to
support this bill, and I reserve the balance of my time.
Ms. SCANLON. Mr. Speaker, I yield 5 minutes to the gentleman from
Oregon (Mr. DeFazio).
Mr. DeFAZIO. Mr. Speaker, I thank the gentlewoman for yielding.
Mr. Speaker, this bill, H.R. 1418, has 51 cosponsors in the House: 26
Democrats, 25 Republicans. It is endorsed by 23 national organizations,
including Consumer Reports, which estimates it will save consumers
billions of dollars a year in health insurance costs, other consumer
rights groups, the American Dental Association, Hospital Association,
and more.
There are only two for-profit industries in America that have an
exemption from antitrust law: One is professional baseball, dating from
the 1920s, and the other is the vital area of health insurance, dating
to the 1940s. This bill will take away that exemption.
What does that mean? Well, right now, insurance companies can and do
get together and collude. Before COVID, they would go to some fancy
resorts, get together, and say: How about you stay out of North Dakota;
we will stay out of South Dakota? You stay out of Oregon; we will stay
out of Washington. Let's divide up the pie here. You decide where you
are selling, and we will decide where we are selling. Oh, and by the
way, here are the things we don't want to cover. Here are the people we
want to redline and exclude.
That is all legal. That is all legal.
What does it do? It drives up the cost and the availability is
diminished for Americans. And now here we are in the midst of COVID and
the estimates are that 5 million people have lost their health
insurance during COVID--5 million people--yet, last year, the health
insurance industry made an eye-popping $33 billion in profits. This
year, the reports are they are doing even better, with more and more
people uninsured.
How are they doing that? Well, they are jacking up copays. They are
jacking up deductibles. They are excluding all sorts of treatments from
coverage. And it is all legal, and they can all get together and say:
Hey, if you won't cover this, we won't cover it. That way we won't lose
customers; you won't lose customers.
What a sweet deal. What a sweet deal.
Well, one in four Americans hesitated to go to the doctor--people who
were insured--or to fill a prescription, get needed treatment because
of the extraordinary copays and high deductibles. So a lot of people
are paying 2,000, 3,000, 4,000, 5,000 bucks before they get any
coverage on these so-called policies.
What is this about? It is about greed. And it is time to end.
This is a vital service for the American people. This bill was part
of the original Affordable Care Act in the House--my provision. It was
stripped
[[Page H4573]]
out in the Senate at the behest of a former insurance executive--good
old Senate--so it didn't get into the final version of ACA. They took
out a lot of other good things, too. The House bill was way preferable
with national exchanges, not-for-profit, et cetera. But, in any case,
it was stripped out.
So the House held another vote after the passage of the Affordable
Care Act in 2010. Tom Perriello, then-Representative for Virginia,
offered my bill on the floor and it passed by 406-19.
What kind of bills pass 406-19?
And then my colead on the bill, Representative Gosar, introduced the
bill in 2017, and it passed 416-7 in the most bitterly partisan
atmosphere in Congress since post-Civil War--416-7.
It is time to get this done.
Finally, we are seeing some action in the Senate. Senator Leahy has
introduced a bill, ranking member of the Committee on the Judiciary,
and Senator Daines. So there are three Democrats, three Republicans on
the bill. Hopefully, the Senate will see the wisdom in helping
Americans afford health insurance, lowering their deductibles, lowering
their copays, lowering their exclusions on prescription drugs.
Mr. Speaker, even under Medicare part D, they are always jacking
people around: Oh, sorry, you can't have that medication anymore. We
just took it off the list last week.
They can do it any time they want. And they can talk to the other
insurers, and say: Hey, we are taking that drug off our list. Will you
take it off your list, because we don't want people to switch to your
plan.
That is all legal now.
Mr. Speaker, after this bill passes, it will no longer be legal. This
will be a tremendous service to the American people at any time in
history, but particularly now in times of COVID and crisis.
Mr. Speaker, I urge my colleagues to support this legislation.
Mr. ARMSTRONG. Mr. Speaker, this is a good bill. I urge my colleagues
to support it, and I yield back the balance of my time.
Ms. SCANLON. Mr. Speaker, I yield myself such time as I may consume.
Healthy competition in health insurance markets is one of the most
critical elements for ensuring that Americans have access to high-
quality, affordable healthcare. When insurance companies are forced to
compete, the American people win.
Unfortunately, too many families are still paying higher premiums and
out-of-pocket costs, in part, because of anticompetitive practices that
health insurance giants are allowed to engage in under existing law.
What is more, there is a statutory loophole for this conduct that
allows insurers to engage in egregious actions like price-fixing, bid-
rigging, and market allocation with total impunity so long as they are
engaged in the business of insurance and it is regulated by a State.
There should be no safe harbor whatsoever for this conduct which
allows insurers to increase the cost of health insurance and impose
additional burdens on families across our Nation when they are already
struggling to make ends meet.
Health insurance companies should be subject to antitrust liability
to the extent that they collude or otherwise engage in anticompetitive
behavior. H.R. 1418 would achieve this result.
Mr. Speaker, I thank Chairman DeFazio for his leadership on this
bill, and I urge my colleagues to vote in favor of this legislation
that is long overdue.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from Pennsylvania (Ms. Scanlon) that the House suspend the
rules and pass the bill, H.R. 1418, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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