Competitive Health Insurance Reform Act of 2020
Floor Speech
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Ms. SCANLON. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1418) to restore the application of the Federal antitrust laws to the business of health insurance to protect competition and consumers, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 1418
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Competitive Health Insurance Reform Act of 2020''. SEC. 2. RESTORING THE APPLICATION OF ANTITRUST LAWS TO THE BUSINESS OF HEALTH INSURANCE.
(a) Amendment to McCarran-Ferguson Act.--Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), commonly known as the McCarran-Ferguson Act, is amended by adding at the end the following:
``(c)(1) Nothing contained in this Act shall modify, impair, or supersede the operation of any of the antitrust laws with respect to the business of health insurance (including the business of dental insurance and limited-scope dental benefits).
``(2) Paragraph (1) shall not apply with respect to making a contract, or engaging in a combination or conspiracy--
``(A) to collect, compile, or disseminate historical loss data;
``(B) to determine a loss development factor applicable to historical loss data;
``(C) to perform actuarial services if such contract, combination, or conspiracy does not involve a restraint of trade; or
``(D) to develop or disseminate a standard insurance policy form (including a standard addendum to an insurance policy form and standard terminology in an insurance policy form) if such contract, combination, or conspiracy is not to adhere to such standard form or require adherence to such standard form.
``(3) For purposes of this subsection--
``(A) the term `antitrust laws' has the meaning given it in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12), except that such term includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent that such section 5 applies to unfair methods of competition;
``(B) the term `business of health insurance (including the business of dental insurance and limited-scope dental benefits)' does not include--
``(i) the business of life insurance (including annuities); or
``(ii) the business of property or casualty insurance, including but not limited to--
``(I) any insurance or benefits defined as `excepted benefits' under paragraph (1), subparagraph (B) or (C) of paragraph (2), or paragraph (3) of section 9832(c) of the Internal Revenue Code of 1986 (26 U.S.C. 9832(c)) whether offered separately or in combination with insurance or benefits described in paragraph (2)(A) of such section; and
``(II) any other line of insurance that is classified as property or casualty insurance under State law;
``(C) the term `historical loss data' means information respecting claims paid, or reserves held for claims reported, by any person engaged in the business of insurance; and
``(D) the term `loss development factor' means an adjustment to be made to reserves held for losses incurred for claims reported by any person engaged in the business of insurance, for the purpose of bringing such reserves to an ultimate paid basis.''.
(b) Related Provision.--For purposes of section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section applies to unfair methods of competition, section 3(c) of the McCarran-Ferguson Act shall apply with respect to the business of health insurance without regard to whether such business is carried on for profit, notwithstanding the definition of ``Corporation'' contained in section 4 of the Federal Trade Commission Act. SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
Mr. Speaker, I rise in strong support of H.R. 1418, the Competitive Health Insurance Reform Act.
This commonsense legislation repeals a longstanding antitrust exemption for the health insurance industry under the McCarran-Ferguson Act. It does so for price-fixing, bid-rigging, and market allocation-- the most egregious kinds of anticompetitive conduct. There is absolutely no justification for this broad antitrust exemption for the business of health insurance.
Congress passed the McCarran-Ferguson Act in response to a 1944 Supreme Court decision finding that the antitrust laws applied to the business of insurance. Both insurance companies and the States expressed concern about that decision. Insurance companies worried that it could jeopardize certain collective practices, like joint rate- setting and the pooling of historical data, and the States were concerned about losing their authority to regulate and tax the business of insurance.
To address these issues, McCarran-Ferguson provides that Federal antitrust laws apply to the business of insurance only to the extent that it is not regulated by State law. Unfortunately, this resulted in a broad antitrust exemption. Industry and State revenue concerns, rather than the vital goals of protecting competition and consumers, were the primary drivers of the act.
In passing McCarran-Ferguson, Congress initially intended to provide only a temporary exemption and, unfortunately, gave little consideration to competition concerns.
Not surprisingly, there is broad support for ending this safe harbor for antitrust violations that are criminally illegal. As the Antitrust Modernization Commission Report noted in 2007, the McCarran-Ferguson exemption should be repealed because it has outlived any utility it may have had and is among the most ill-conceived and egregious examples.
Furthermore, it is far from clear that the McCarran-Ferguson antitrust exemption was ever justified in the first place. Antitrust exemption should be exceedingly rare and should be enacted only where there are strong policy reasons for such exemption.
Carving out an entire part of a healthcare system from the antitrust laws should be unthinkable, particularly when healthcare costs are so high for many families. That is why it is time to repeal the special exemption for the insurance industry.
Mr. Speaker, I thank my colleague, Chairman DeFazio, for his leadership on this important legislation. I urge my colleagues to support this bill, which previously passed the House with an overwhelming bipartisan vote of 416-7, and I reserve the balance of my time.
Healthy competition in health insurance markets is one of the most critical elements for ensuring that Americans have access to high- quality, affordable healthcare. When insurance companies are forced to compete, the American people win.
Unfortunately, too many families are still paying higher premiums and out-of-pocket costs, in part, because of anticompetitive practices that health insurance giants are allowed to engage in under existing law.
What is more, there is a statutory loophole for this conduct that allows insurers to engage in egregious actions like price-fixing, bid- rigging, and market allocation with total impunity so long as they are engaged in the business of insurance and it is regulated by a State.
There should be no safe harbor whatsoever for this conduct which allows insurers to increase the cost of health insurance and impose additional burdens on families across our Nation when they are already struggling to make ends meet.
Health insurance companies should be subject to antitrust liability to the extent that they collude or otherwise engage in anticompetitive behavior. H.R. 1418 would achieve this result.
Mr. Speaker, I thank Chairman DeFazio for his leadership on this bill, and I urge my colleagues to vote in favor of this legislation that is long overdue.
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