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AHIP Statement on the McCarran-Ferguson Act
Washington, DC – Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today on proposed legislation to repeal portions of the McCarran-Ferguson Act:
“The rhetoric surrounding repeal of McCarran-Ferguson does not match the reality of the situation. Health insurance is one of the most regulated industries in America at both the federal and the state levels. The Act is extremely limited in scope and has nothing to do with competition within the health insurance industry. In fact, a wide range of insurer activities, including mergers and many types of business practices, are and always have been subject to federal antitrust laws and to enforcement by the Department of Justice.
“The Congressional Budget Office has reported that repeal of McCarran-Ferguson will not lower health care costs. Repeal could create legal uncertainty that could disrupt important initiatives to improve patient care, such as aggregating quality data to empower patients with better information, or administrative simplification reforms to enhance efficiency.
"The real focus should be on addressing the rising cost of medical care, which is putting an unsustainable burden on families, employers, and the federal budget."
Additional information on the McCarran Ferguson Act
New AHIP Letter: Last week, AHIP sent a letter to Capitol Hill, which states: “The claim that McCarran-Ferguson allows insurers to engage in practices such as price fixing, market allocation, and bid rigging is incorrect and the types of activities the legislation proposes to address already are subject to federal and state antitrust laws.”
National Association of Insurance Commissioners letter (10/21/2009): “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 are harmful to consumers and cannot be tolerated. However, we want to assure you that these activities are not permitted under the McCarran-Ferguson Act and are not tolerated under state law. Indeed, state insurance regulators actively enforce prohibitions in these areas.”
Congressional Budget Office analysis (10/29/09): “The analysis also takes into account the provisions of section 262 of Division A regarding the application of federal antitrust laws to health insurers. CBO estimates that implementing those provisions would have no significant effects on either the federal budget or the premiums that private insurers charged for health insurance.”
Congressional Research Service analysis (8/31/2009): “Given the courts’ narrowing definition of the ‘business of insurance,’ they would not be likely, in any event, to find such activities as market allocation, tying, or monopolization protected by McCarran-Ferguson from the application of the antitrust laws.”
