Providing For Consideration Of H.R. 4626, Health Insurance Industry Fair Competition Act

Floor Speech

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Mr. GARAMENDI. Mr. Speaker, members of the House, we have before us a very simple but extremely important proposal by our Republican colleagues to provide the insurance industry with the opportunity to continue to collude, to set prices, and to harm the consumers. Call it a safe harbor. It is indeed a very safe harbor to do what is illegal in every other portion of the American economy except for baseball.

So why should we approve what the Republicans want here? No good reason at all. Competition is necessary. A safe harbor is specifically designed to allow the insurance companies to continue to gather specific information that they then use to set prices and to collude and to harm the consumers as well as the providers.

There are two cases out there over the last decade in which the industry has clearly colluded and harmed providers, a case in New York and another case that was put against the insurance companies by the doctors. This proposed amendment by Congressman LUNGREN would harm both the providers as well as the consumers, and provide a safe harbor to do what is illegal in every other part of the American economy, that is to set prices. We ought not to do it. We ought to put this aside.

Mr. DANIEL E. LUNGREN of California. Will the gentleman yield?

Mr. GARAMENDI. I yield to the gentleman from California.

Mr. DANIEL E. LUNGREN of California. Could I just ask my friend from California, isn't it true that if there was collusion utilizing this information, that would still be prosecutable under the amendment that I suggest because it is prosecutable at the present time under State action theory and has been pursued by various States?

Mr. GARAMENDI. The proposed amendment opens the door for collusion. It gives the tools for collusion to the companies. We ought not do that. And there is no other part of the American economy that such collusion and such an open door and invitation to collusion is provided.

Ms. FOXX. I yield 30 seconds to the distinguished gentleman from California (Mr. Daniel E. Lungren).

Mr. DANIEL E. LUNGREN of California. Well, I know we have had people on this floor who say they have no expertise but they say this amendment does certain things. I did spend 8 years as the Attorney General of California. We had the most active antitrust public law office in the country other than the U.S. Justice Department.

I might just say, this is the first time I have ever heard that Jack Brooks was presenting legislation on the floor of the House or in Judiciary that was to protect insurance companies or allow collusion. The language I used is taken from the Jack Brooks bill. The language I use is specifically the language that was adopted on a bipartisan basis and said by the chairman of the Judiciary Committee was an excellent clarifying amendment.

Ms. PINGREE of Maine. I yield 30 seconds to the gentleman from California (Mr. Garamendi).

Mr. GARAMENDI. When my colleague from California was attorney general, I was insurance commissioner, and we had a grand fight over this very issue, the very issue of whether the State of California would allow the insurance companies to continue to use rating bureaus to get their price information and to continue to set prices in what could be a collusion. We put that aside. The regulations that I put into effect were adopted, and the end result was, when they could no longer use a rating bureau, which this proposal would allow, the prices began to drop in homeowners and auto insurance in California.

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