House Panel Votes to End Health Insurance Antitrust Exemption

Posted by Chris Pace on October 21, 2009 under News | Read the First Comment

The U.S. House Judiciary Committee voted to repeal the insurance industry’s federal antitrust exemption in a move aimed at spurring competition and controlling the cost of premiums.

The panel, in a 20-9 vote, approved legislation to ban companies from engaging in price fixing, bid rigging and market allocation. The measure may be combined with a proposed overhaul of the health-care system the House is considering.

Last week, Justice Department antitrust chief Christine Varney testified before the Senate Judiciary Committee that ending the exemption would create more competition. Insurance companies “are highly concentrated in many geographic regions,” meaning there “is very little incentive to compete on price,” she said.

The Obama administration’s pursuit of revamping heath care has increased interest in repealing the insurance industry’s special antitrust status.

Congress exempted the insurance industry from antitrust laws in 1945 after the Supreme Court ruled it was subject to federal regulation. The states have traditionally been the chief regulators of the industry.

To contact the reporter on this story: Chris Stern in Washington at cstern3@bloomberg.net

Last Updated: October 21, 2009 11:11 EDT