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House panel votes to end health insurers' antitrust exemption

WASHINGTON — Democrats launched a drive at both ends of the Capitol on Wednesday to strip the insurance industry of its decades-old exemption from federal antitrust laws, part of an increasingly bare-knuckled struggle over landmark health care legislation sought by President Barack Obama.

If enacted, the change would put an end to "price-fixing, bid-rigging and market allocation in the health and medical malpractice" insurance areas, said Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee. Leahy said he would seek a vote on the plan when the Senate debates health care legislation in the next few weeks.

Leahy spoke at virtually the same time the House Judiciary Committee voted 20-9 to end an industry exemption that dates to 1945. Three Republicans supported the move.

The McCarran-Ferguson Act of 1945 gives states authority to regulate the insurance industry for antitrust matters, and the companies are exempt from federal jurisdiction.

Senior Democratic officials in the House said the leadership was inclined to incorporate the measure into the broader health care bill expected to be brought to the floor for a vote within a few weeks.

Responding to the day's developments, the health insurance industry said the legislation was based on a misperception of existing law. "We believe that health insurers have not been engaging in anticompetitive conduct and that McCarran-Ferguson does not provide a shield for such conduct," Karen Ignagni, president and CEO of American's Health Insurance Plans, wrote to Rep. John Conyers, the Michigan Democrat who chairs the House Judiciary Committee.

"Thus, the bills attempt to remedy a problem that does not exist," she wrote.

Democrats lose Test vote: Democrats lost a big test vote on health care legislation on Wednesday as the Senate blocked action on a bill to increase Medicare payments to doctors at a cost of $247 billion over 10 years. Senate Majority Leader Harry Reid, D-Nev., needed 60 votes to proceed. He got only 47. A dozen Democrats and one independent crossed party lines and voted with Republicans on the 53-47 roll call. The Medicare bill has become a proxy for larger issues in the debate over the health care legislation. Reid said the bill, by averting big cuts in physician fees, guaranteed that doctors would continue to accept Medicare patients. Republicans said it was fiscally irresponsible since none of the costs were offset or paid for. Senate Democratic leaders said the bill had strong support from the White House, the American Medical Association and AARP.

Costs projected to rise: The Office of the Actuary, which does long-range cost estimates for Medicare, said Wednesday that the nation's medical costs will keep spiraling upward at a rapid pace under Democratic legislation pending in the House. The health care tab, now at about $2.5 trillion annually, is projected to approach $4.7 trillion in 2019 without the legislation; with it, spending would be nearly $4.8 trillion in 2019. The Obama administration challenged the analysis, saying it is out of date because the House bill is being rewritten to bring costs under tighter control and will be merged with other House legislation and a Senate bill. Republicans said the report is a warning sign that health care legislation is likely to fall short of slowing torrid rates of medical inflation.

Web site for uninsured dead: Rep. Alan Grayson, D-Orlando, who said Republicans want the uninsured to "die quickly" if they get sick, has set up a Web site titled the site "Names of the Dead" where people can post names of loved ones who have died for lack of health coverage. Grayson has cited research showing that 44,000 such people die each year. Several names had already been posted to the Web site Wednesday afternoon.

House panel votes to end health insurers' antitrust exemption 10/21/09 [Last modified: Wednesday, October 21, 2009 11:23pm]
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