[Congressional Record Volume 166, Number 221 (Tuesday, December 29, 2020)]
[Senate]
[Pages S7966-S7967]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COMPETITIVE HEALTH INSURANCE REFORM ACT
Mr. DAINES. Mr. President, I rise today to speak about my bipartisan
legislation, the Competitive Health Insurance Reform Act, which I
introduced with my colleague Senator Patrick Leahy. This is important
legislation that will protect consumers from anticompetitive practices
by repealing the outdated antitrust exemption for the health insurance
industry. This bill has wide bipartisan support, as well as a strong
history of near-unanimous congressional consensus, having passed the
House of Representatives three times, most recently this September.
In 1944, the Supreme Court ruled in United States v. South-Eastern
Underwriters that the business of insurance was a form of interstate
commerce. This meant that the health insurance industry would be
subject to Federal antitrust laws under the Commerce Clause of the
Constitution. The insurance industry began raising uncertainties about
whether this meant that States would no longer have authority to
regulate insurance. When Congress acted to reaffirm this State
authority, in the McCarran-Ferguson Act, the insurance industry managed
to add a last-minute special-interest loophole that exempted the
business of insurance from Federal antitrust laws.
It has become clear that this antiquated exemption has effectively
given insurance companies the power to collude to drive up prices,
restrict competition, and deny consumers choice. The large health
insurance companies of today have taken advantage of this exemption to
abuse the market and artificially inflate healthcare costs. As a
result, consumers are paying higher prices to get basic healthcare
services, which couldn't be a worse outcome in the middle of a major
pandemic.
I recognize concerns have been raised about whether this legislation
might impair or create uncertainty regarding the authority of State
insurance regulators. I appreciate hearing from all stakeholders and
wish to put those concerns to rest by making clear the intent and scope
of the bill. This legislation merely amends a peripheral provision of
the McCarran-Ferguson Act containing an antiquated exemption from
Federal antitrust laws as it applies to health insurance companies. It
does not in any way interfere with, supersede, or abrogate the
authority provided and guaranteed by the McCarran-Ferguson Act to State
insurance regulators to regulate the health insurance industry.
This legislation would ensure that health insurance companies would
be subject to Federal antitrust laws in the same way as the rest of the
American economy, including other regulated sectors. Most importantly,
as this bill does not disturb any of the authority provided to State
insurance regulators under the McCarran-Ferguson Act, it does not
empower Federal authorities to interfere with, supersede, or prevent
states from regulating the health insurance industry however they see
fit.
Simply put, this legislation would give the Department of Justice and
the Federal Trade Commission authority to apply antitrust laws to
anticompetitive practices in the health insurance industry.
Furthermore, it is the intent of the authors of this legislation that
the DOJ and FTC notify and work with states on investigations they have
received or are undertaking that involve health insurance entities in
their state.
The Competitive Health Insurance Reform Act will restore full
transparency, promote oversight, and encourage competition within the
health insurance industry. I look forward to this legislation being
signed into law by the President.
Ms. COLLINS. Mr. President, I appreciate Senator Daines joining me to
clarify the intent of the Competitive Health Insurance Reform Act of
2019. This legislation, which Senator Daines has introduced with
Senator Leahy, would modify the McCarran-Ferguson Act by eliminating
the health insurance industry's exemption from Federal antitrust laws.
That sounds like a good idea, but it has implications for longstanding
State regulation of the insurance industry.
States have had the primary responsibility for the regulation of
health insurance since the 1940s. Given my past experience as
commissioner of Maine's Department of Professional and Financial
Regulation, I know firsthand that State insurance regulators do a good
job of responding to the needs and concerns of their insurance
consumers. To protect consumers, State insurance
[[Page S7967]]
regulators hold probing hearings on rate requests which often lead to
lower rates being approved. Most State insurance regulators have
consumer protection advocates who resolve disputes between insurers and
individual consumers. State regulators do not tolerate unfair or
anticompetitive practices. As the National Association of Insurance
Commissioners wrote to the leaders of the Senate and the Senate
Judiciary Committee, ``The potential for bid rigging, price-fixing and
market allocation is of great concern to state insurance regulators and
we share your view that such practices would be harmful to consumers
and should not be tolerated. However, we want to assure you that these
activities are not permitted under state law. Indeed, the state
insurance regulators in all states actively enforce their antitrust
rules and review rates to ensure they are actuarially justified,
sufficient for solvency and nondiscriminatory.''
Based on this experience, I have consistently raised concerns about
legislation that could interfere with the current State-level
regulation of insurance and could ultimately harm Maine consumers and
smaller insurers. These concerns extend to the Competitive Health
Insurance Reform Act.
While the bill does not directly modify the portion of McCarran-
Ferguson that affirms State regulatory authority, it, however, does add
a layer of Federal review, and we need to ensure that in doing so we do
not create increased confusion, cost, and possible conflicts between
State and Federal efforts.
This is why it is very important to make clear Congress's intent that
along with the changes specified in the bill, it is Congress's
expectation that the Department of Justice and the Federal Trade
Commission must notify State bureaus of insurance and attorneys general
of any complaints or investigations they have received or are
performing that involve entities in their state. I appreciate Senator
Daines' willingness to join me today to ensure this intent is clearly
stated in the Congressional Record.
Given the agreement to provide formal clarification of the
expectation that DOJ and FTC shall provide notification to States
regarding complaints or investigations they have received or are
performing, I will withdraw my objection to passage of this
legislation.
Thank you.
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