As prepared for delivery
“The antitrust laws enacted in the early 20th century provide essential protections for consumers and businesses, and those protections should apply to Americans buying health and medical malpractice insurance. As Congress debates the costs of health care, it is very much worth nothing that purchasers of these insurance policies are particularly susceptible to industry collusion leading to inflated prices. But under current law, health and medical malpractice insurance providers are exempt from federal antitrust regulations. This is because, as we all know, the insurance industry was given a statutory exemption from antitrust laws over sixty years ago by the McCarren-Ferguson Act.
“Since McCarren-Ferguson was enacted, it has become clear that health and medical malpractice insurers have abused this exemption to the detriment of patients and doctors everywhere. An industry-specific antitrust exemption is rarely justifiable and if there is a good reason to maintain the current exemption for these parts of the insurance industry, I haven’t heard it.
“Simply put, because of the insurance exemption, a competitive market for health and medical malpractice insurance does not exist. In 26 states, a single insurer covers at least half of the population. In 39 states, two insurers control more than half of the insurance market. A recent survey by the American Medical Association found that most metropolitan areas have a “highly concentrated” commercial market for health insurance.
“This lack of competition has hurt both patients and doctors. While market-dominating health insurance companies have made record profits, basic coverage has become unaffordable for millions of Americans. In Wisconsin, the price of health insurance premiums for families and individuals has doubled over the last ten years. If current trends hold, family health insurance for a Wisconsin family will consume 46.2 percent of the projected median family income in 2016. In addition, doctors around the country are suffering as medical malpractice insurance providers profit from premiums that are not commensurate with the cost of claims.
“Without true competition, patients and doctors have little choice but to continue paying whatever premiums the dominant insurers in their market decide to charge. Addressing this problem is crucial to health care reform and requires legislative action to ensure that health and medical malpractice insurance companies do not engage in anticompetitive behavior. Although insurance companies have certain informational needs, there is no reason to exempt them from regulation of the most harmful anticompetitive practices. Without a repeal of the antitrust exemption, insurance companies will continue to have the power to gouge patients and doctors.
“I am pleased to cosponsor S. 1681, Chairman Leahy’s bill to fix this serious problem, and I commend him for holding this important hearing.”
