Health Insurance Industry Fair Competition Act

Floor Speech

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Mr. GARAMENDI. Chairman Conyers, thank you so very much.

Mr. Speaker, I keep thinking about that movie ``Casablanca.'' The guy says, I am shocked to learn that the Republican Party that has championed itself with the free market economy would oppose a measure that would, in fact, allow for competition.

Now, a lot has been said on the floor today, but the fact of the matter is--and I spent 8 years of my life as the insurance commissioner in California, and I am here to tell you that the insurance companies, using the exemption from the antitrust laws, are able to conspire to fix prices on premiums and on payments to doctors. That has been proved in cases, national cases, brought by States and by private attorneys as well as by the attorney general of New York.

Similarly, they are able to vertically integrate. In a case that took place in New York, where UnitedHealthcare owns a company called Ingenix, which actually sets the reimbursement rates, they are able to have a serious conflict of interest. The lower the normal reimbursement rates, the more the copay to consumers.

So there are varieties of practices that take place in the insurance industry, practices which are anticompetitive and anticonsumer. What we are doing here is very simple and very, very straightforward. It is this:

Under the antitrust laws that have been in place since Teddy Roosevelt is a long history of people pushing back against the powerful interest groups--in this case, the powerful interest groups of the insurance industry. It is time for us to simply say, You must compete as every other part of the American economy must. Vertical integration to the detriment of consumers: not allowed. Price-fixing on selling the products: not allowed. Not able to use that market power to set prices on the payment to doctors and hospitals. All of those things have taken place. The proof is there.

With regard to the States' ability to do this, yes, many States do have antitrust laws, and we are thankful for that, but the Federal Government, the Federal Attorney General, is precluded from involving in the matter of competition in this industry.

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Mr. GARAMENDI. Thank you.

Mr. Speaker, directly to Mr. Lungren's proposed amendments, actually there are three major elements. If you look at those major elements, they do in fact give the insurance industry the opportunity to collude, because that is the data that sets future prices for consumers as well as payments for doctors.

I know this business. I was the Insurance Commissioner in California for 8 years. And I know that if an insurance company is able to collude in collecting, compiling, classifying, or disseminating historic data and determining a loss development factor, and finally, using actuarial services, they have the power to collude. This is an incredible loophole. It should never be allowed.

And the final point having to do with the insurance commissioners collecting data, nowhere in any antitrust laws are States precluded from any collection of data. This ought not be put forth. I ask for a ``no'' vote.

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