rssDems vs. Insurance Industry, Round II
Thursday, October 15, 2009 at 6:00 am
- 38 Comments
Senate Majority Leader Harry Reid (D-Nev.) (WDCpix)
Health insurance companies, for decades exempt from federal anti-trust laws, are exploiting that privilege to churn profits at the expense of patients, a number of Senate Democrats charged Wednesday. The lawmakers — including Senate Majority Leader Harry Reid (D-Nev.) — want to repeal the exemption as part of broader efforts this year to overhaul the nation’s dysfunctional health care system.
“There is no reason why insurance companies should be allowed to form monopolies and dictate health choices,” Reid told the Senate Judiciary Committee.
Illustration by: Matt Mahurin
The comments arrive during a week when the insurance industry and Democrats have been at each other’s throats over health reform — a quarrel that threatens to endure through the debate. The flames were ignited late Sunday after the health insurance lobby issued a controversial report charging that legislation passed this week by the Senate Finance Committee would hike Americans’ insurance premiums by thousands of dollars each year. PricewaterhouseCoopers, the consulting firm that conducted the study, later conceded that it had considered only a small portion of the Democrats’ strategy, ignoring, among other things, the hundreds of billions of dollars in federal subsidies designed to keep premium costs affordable.
Democrats have pounced on the report as an indication that the insurance industry, despite claims of support for the general concept of health reform, never intended to cooperate with efforts to make coverage affordable to millions of uninsured Americans. The report is further evidence, many lawmakers maintain, that Congress should create a public insurance option to compete with private companies. Repeal of the anti-trust exemption, those same voices are arguing, would be another step toward keeping the industry honest and coverage costs affordable.
“While the insurance industry hides behind its exemption, patients and doctors have continued paying artificially inflated prices, as costs continue to rise at an alarming rate,” said Sen. Patrick Leahy (D-Vt.), chairman of the Judiciary Committee. “The cost spiral is just fine for insurance companies, but it punishes patients, American businesses large and small, and taxpayers.”
Under current law, most businesses are subject to federal anti-trust rules designed to foster competition, keep costs low and preclude the rise of monopolies. But a 1945 law, called the McCarran-Ferguson Act, carves out an exception for health and medical malpractice insurers, which instead are regulated by states.
The industry argues that the exclusion bolsters competition by allowing smaller companies to obtain otherwise unknowable pricing data as they seek to enter new markets. But a growing number of Democrats and consumer groups maintain that the exception simply allows companies to feign competition while they’re really at work colluding on profit-enhancing schemes.
Separate from the broader reform legislation, Leahy has sponsored a bill that would eliminate the exemption for the most egregious anti-trust practices – those involving price fixing, bid rigging and market allocations, where “competitors” divide geographic markets among themselves in order to avoid competition. In all other cases, under Leahy’s proposal, the McCarran-Ferguson Act exemptions would remain in place.
The insurance industry argues that, not only is the Leahy bill unnecessary, but it would lead to increased costs by stifling competition. Lawrence Powell, a finance professor at the University of Arkansas who testified Wednesday on behalf of the Physician Insurers Association of America, maintained that he’s “never observed” any price-setting collusions between competing companies, “because it’s illegal.”
“All of the behaviors this bill seeks to curtail,” Powell said,” are neither apparent in the market, nor permitted by current law.”
But consumer advocates aren’t convinced. J. Robert Hunter, director of insurance at the Consumer Federation of America, told lawmakers that the exemptions simply shield the industry from the types of practices that ultimately limit competition at the expense of patients.
“They get together on claims. They get together on pricing,” Hunter said. “They do many, many things that would violate the anti-trust laws if those laws applied to them.”
Hunter urged the creation of a public option “to test the market” in order to learn the extent of the private-insurer manipulations. Today, Hunter said, there’s no indication to what extent companies are passing on to consumers the costs of, for example, advertisements opposing health care reform.
“We’ll be paying the bill,” Hunter said.
Reid agreed, testifying that the insurers’ exemption “has been anticompetitive and damaging to the American economy.”
“Insurance companies have become so large they dominate entire regions of the country,” Reid said. “What a sweet deal they have.”
Reid is responsible for weaving together the Finance proposal and another sweeping health reform bill passed in July by the Senate Health, Education, Labor and Pensions Committee. That the Senate majority leader came out so vocally in support of the Leahy bill has left supporters optimistic that the proposal could work its way into the final package.
A 2007 study lends credence to the Democrats’ concerns about the consolidation of the insurance industry. Conducted by the American Medical Association, the nation’s largest physician lobby, the survey found that, in most states, the top two carriers consume an overwhelming majority of the private insurance marketplace. In Maine, for example, the top two companies control 88 percent of the insurance market. In both Montana and Wyoming, the number is 85 percent. The lowest market concentration, AMA found, was in Florida, where the top two insurers still represent 45 percent of the market.
More recently, the non-partisan Government Accountability Office found that the top five insurers represent more than 90 percent of the market in no fewer than 23 states.
Numbers like those provide some evidence of what’s at stake for the insurance industry, which is among the most powerful lobbies on Capitol Hill year after year. Indeed, the insurance industry has contributed more than $8.4 million to lawmakers this year alone, according to the Center for Responsive Politics.
But preserving the status quo would come at a cost, according to some Justice Department officials. Christine Varney, assistant attorney general in DOJ’s antitrust division, told lawmakers Wednesday that she’s “very skeptical” that such high market concentrations don’t lead to both a reduction in competition and an increase in consumer costs.
“There is real cause for concern, when you’re reducing competition in those markets,” Varney said. “When you don’t have to compete, you can get pretty big profit margins.”
38 Comments
Pingback posted October 15, 2009 @ 6:18 am
[...] the rest of this great post here [...]
Pingback posted October 15, 2009 @ 6:45 am
[...] the rest here: Dems vs. Insurance Industry, Round II « The Washington Independent Tags: anti-trust, congress, economy, Finance, follow-us-on-twitter, health, industry, Insurance, [...]
Pingback posted October 15, 2009 @ 7:14 am
[...] Read the original post: Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Pingback posted October 15, 2009 @ 7:50 am
[...] See more here: Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Pingback posted October 15, 2009 @ 8:32 am
[...] Read the original: Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Pingback posted October 15, 2009 @ 8:46 am
[...] from: Dems vs. Insurance Industry, Round II « The Washington Independent :are-exploiting, churn-profits, exempt-from, expense, federal-anti-trust, for-decades, [...]
Pingback posted October 15, 2009 @ 8:50 am
[...] Read the rest here: Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Pingback posted October 15, 2009 @ 9:19 am
[...] More here: Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Pingback posted October 15, 2009 @ 9:20 am
[...] here to read the rest: Dems vs. Insurance Industry, Round II Share and [...]
Pingback posted October 15, 2009 @ 9:26 am
[...] more: Dems vs. Insurance Industry, Round II By admin | category: consulting companies | tags: broader-efforts, companies, [...]
Pingback posted October 15, 2009 @ 9:33 am
[...] post: Dems vs. Insurance Industry, Round II « The Washington Independent Share and [...]
Pingback posted October 15, 2009 @ 10:01 am
[...] Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Pingback posted October 15, 2009 @ 2:17 pm
[...] Senate Democrats say the recent attacks from the insurance industry prove the necessity of a public option. [...]
Pingback posted October 15, 2009 @ 4:42 pm
[...] Go here to read the rest: Dems vs. Insurance Industry, Round II « The Washington Independent [...]
Comment posted October 15, 2009 @ 3:56 pm
“There is no reason why insurance companies should be allowed to form monopolies and dictate health choices,” Reid told the Senate Judiciary Committee.
Dictate? The public option will be dictated by the government. If you dont get their insurance your going to get sued? I dont call that an option. This will force insurance companies that employ millions of people to go bankrupt thats millions more unemployed under Obama. With those people unemployed im sure they wont be able to afford health insurance. The public option; “the government takeover” is nonsense!
Comment posted October 15, 2009 @ 5:11 pm
The fact remains that big insurance by refusing care to patients and reimbursement to doctors over typos has ticked everyone off – both patients and doctors. They have a virtual monopoly over the whole process a hugely well financed lobby team and representatives on both sides of the isle.
A friend of mine recently laid off without children – just he and his spouse is paying $2,500.00 dollars a month for his COBRA – that is outrageous. Health insurance costs more than his mortgage – unbelievable.
In 2007, before the current economic downturn, an American family filed
for bankruptcy in the aftermath of illness every 90 seconds; three-quarters of them were insured. Over 60% of all bankruptcies in the United States in 2007 were driven by medical incidents.
The insurance companies have been pillaging the overall market and are tone deaf to the suffering they have caused.
Repealing their anti-trust status is decades overdue!
Paul Burke
Author-Journey Home
Comment posted October 15, 2009 @ 5:19 pm
Take a deep breath William right now you don't have a choice with a public option you can choose not to be raped by the insurance industry. However if you prefer to pay 600 a month or have 400 a month deducted from your pay check – instead of the 100.00 dollars a month federal employees pay then their is hope for you.
A public option coupled with opening up the federal insurance to everyone (incidentally that insurance is big blue or optima and run by the same private insurance companies ripping us all off – its cheaper because more people are in the pool) and repealing their ridiculous anti-trust exemption will lower costs for everyone and benefit the entire national economy – unless of course you are not interested in more money in the pockets of the middle class.
Comment posted October 15, 2009 @ 7:21 pm
Insurance has become the biggest of big Ponzi schemes. You pay into it for years on end, and then when you become elderly guess what they turn you over to med-icare. I am not one for government ran health care, but our current system is broken by all accounts. It could be fixed by some simple changes.
Portability, in the form of health savings programs. Tort Reform. Interstate purchasing options. Let the government pick up the tab for those using emergency services for general health care needs. Oh and how about some accountability from government auditing agencies, like the IRS on steroids.
Comment posted October 15, 2009 @ 7:43 pm
** POORER AMERICAN ACTIVE DUTY U.S. MILITARY AROUND THE WORLD WHO ARE RISKING AND LOSING THEIR LIVES FOR ALL OF US ~ HAVE FAMILIES BACK HOME WHO ARE ALSO DYING WITHOUT HEALTH*CARE **
~ PRESIDENT OBAMA AND U.S. SENATOR OLYMPIA SNOWE OF MAINE BOTH KNOW THAT ANY FUTURE HEALTH*CARE PLAN FOR OUR NEW AMERICA NEEDS TO ALSO ENCOMPASS ALL FAMILY MEMBERS(PARENTS & SIBLINGS) OF ACTIVE DUTY MILITARY MEMBERS…ANYTHING LESS WOULD BE UN*AMERICAN ~
**JUST MAYBE AMERICA NEEDS A FEW MORE REVOLVING DOORS IN OUR U.S. CONGRESS **
OUR COUNTRY COULD REALLY USE MANY MORE SINCERE AMERICANS LIKE THIS SPECIAL U.S.SENATOR OLYMPIA SNOWE FROM MAINE WHO CONSIDERS THIS COUNTRIES 45 MILLION POOR AMERICAN MEN WOMEN AND CHILDREN WITHOUT PROPER HEALTH CARE LIKE HER OWN FAMILY AHEAD OF HER ELECTED POLITICAL FAMILY **
45 MILLION POORER AMERICANS HAVE OBVIOUSLY BEEN TOUCHED BY AN ANGEL WITH THE PEOPLES U.S. SENATOR SNOWE OF MAINE.
LAWYERS FOR POOR AMERICANS THANKS THIS SPECIAL WOMEN FROM THE CARING STATE OF MAINE FOR SHOWING THE REST OF AMERICA THAT GODS VILLAGE OF ANGELICA BEINGS CAN EVEN BE HERE WITH US EVERY~DAY IN THE FLESH.
————————————————————————————————————————
~ OUR U.S.CONGRESS AT LEAST DOES NOT DISCRIMINATE…THEY AFFORD POORER AMERICANS THE SAME EMERGENCY ONLY HEALTH*CARE THAT ILLEGAL ALIENS RECEIVE ~
AMERICA~LOVE IT OR LEAVE IT~ 45,000 DEAD POOR AMERICANS LEAVE U.S. EVERY*YEAR DUE TO 3rd WORLD HEALTH CONDITIONS ??
** POLITICS IN AMERICA IS VERY SIMPLE TO UNDERSTAND WHEN OUR MIDDLE~CLASS & WORKING POOR CITIZENS ARE ALL BEING FORCED 2 ALLOW BIG $$$ TO CONTROL THE PEOPLES HALLS OF THE U.S.CONGRESS..
~ SADLY,OUR VERY OWN AMERICAN HEALTH*CARE SATANIC VERSES HAS KEPT 45 MILLION POOR AMERICANS IN 3rd WORLD HEALTH CONDITIONS~
DON’T WORRY BE HAPPY ~ THE WORLDS SELECT BILLIONAIRES AND THEIR FRONT CORPORATIONS WILL ALL GET ON BOARD THE NEW HEALTH~TRAIN OF $$$…**ADDING 45 MILLION MORE AMERICAN CITIZENS TO THE CURRENT GIVEN PROFIT MARGINS + WITH A FUTURE AMNESTY PROGRAM (6 months) AFTER NEXT U.S.PRESIDENTIAL ELECTION = $$$$$$$$$………
WEALTH~CARE FOR ALL THE HEAVILY INVESTED INTERNATIONAL AND AMERICAN BILLIONAIRES IN THE CURRENT U.S.HEALTH FOR THE WEALTHY ONLY SYSTEM WILL NOT END ANYTIME SOON… IT WILL ONLY BE RE~ARRANGED TO MAKE SURE ALL THESE MEGA CAPITALISTS PROSPER IN JUST ANOTHER FASHION .
THE FINE ART OF DENYING 45 MILLION AMERICANS HEALTH~CARE IN OUR JUDEO~CHRISTIAN NATION IS NOT RACIST AT ALL… IT’S JUST OUR BEHIND THE SCENE WEALTHY ELITE CITIZENS USING THEIR TREMENDOUS WEALTH TO DIRECTLY INFLUENCE OUR U.S. CONGRESSIONAL REPRESENTATIVES IN KEEPING ALL THE little poor folk down *
AMERICAN RELIGIOUS LEADERS ALL ACROSS THE USA HAVE ALWAYS BEEN ABLE TO COUNT ON THEIR RELIGIOUS FLOCK TO CONTRIBUTE(TITHE)THEIR HARD EARNED MONIES TO THEIR MINISTRIES EVERY WEEK. THE MAJORITY OF AMERICANS ATTENDING RELIGIOUS SERVICES IN THE U.S. ARE MIDDLE~CLASS AND WORKING POOR CITIZENS WHO NOW DESPERATELY NEED THE HELP AND SUPPORT FROM THESE SAME U.S.RELIGIOUS LEADERS IN LOBBYING THE U.S.CONGRESS TO PROVIDE PROPER HEALTH~CARE FOR ALL POORER AMERICANS.
***THERE ARE CURRENTLY AN ESTIMASTED 45 MILLION MEN WOMAN AND CHILDREN WITHOUT HEALTH~CARE IN THE WEALTHIEST COUNTRY IN THE WORLD????
SILENT AMERICAN RELIGIOUS LEADERS WHO ALL HAVE HEALTH~CARE FOR THEMSELVES AND THEIR FAMILIES IS MUCH MORE FRIGHTENING THEN THE POSSIBLE DENIAL OF A FUTURE HEALTH~CARE PLAN FOR ALL…
**45,OOO AMERICANS DIE EACH YEAR IN THE WEALTHIEST COUNTRY IN THE WORLD DIRECTLY RELATED TO THEIR LACK OF PROPER HEALTH*CARE.
LAWYERS FOR POOR AMERICANS IS A WWW VOLUNTEER LOBBY FOUND WITH ANY SEARCH ENGINE. (424-247-2013)
Pingback posted October 15, 2009 @ 11:27 pm
[...] the Democrats’ concerns about the consolidation of the insurance industry. Excerpt from: Dems vs. Insurance Industry, Round II « The Washington Independent Share and [...]
Pingback posted October 16, 2009 @ 12:23 am
[...] as the Senate Judiciary Committee was examining an antitrust exemption enjoyed by private insurers, Sen. Al Franken (D-Minn.) pointed to the Anthem [...]
Pingback posted October 16, 2009 @ 10:31 am
[...] post: Dems vs. Insurance Industry, Round II « The Washington Independent Share and [...]
Pingback posted October 16, 2009 @ 7:21 pm
[...] more here: Dems vs. Insurance Industry, Round II « The Washington IndependentSHARETHIS.addEntry({ title: "Dems vs. Insurance Industry, Round II « The Washington Independent", [...]
Pingback posted October 17, 2009 @ 4:17 pm
[...] 15 minutes of fame on to kill single-handedly. And it’s not just Olympia Snowe or Maine. In fact: A 2007 study lends credence to the Democrats’ concerns about the consolidation of the insurance [...]
Comment posted October 18, 2009 @ 4:20 pm
What I want to know is WHO GAVE insurance companies the exemption from anti-trust laws in the first place AND if they haven't ALSO given exemptions to all the other Corporations in the country depending on which ones give the biggest donations to campaign funds.
We know they went after Microsoft because OTHER corporations that happened to be more favorable to campaigns at the time were complaining that Bill Gates didn't PLAY FAIR when he wouldn't let them all have his microchip free of charge. But at the same time they were “breaking up Microsoft” to “Spread the Wealth” they were ALSO giving subsidies and PERKS of ALL KINDS from the tax payers DOLE to consolidate Newspaper/tv/radio/magazine conglomerates, letting food giants buy up ALL local stores, letting giant multinational pharmaceuticals put all LOCAL pharmacies out of business and buy THOSE out, leaving everyone across the country with Walmart, RiteAid, Walgreens and one or two others, which, in the bigger scheme of things are probably ALL owned by the same small group of CEOs. What about ignoring the separation of Church and State by allowing off the wall and phony religious BARONS, such as the 700CLUBs fruitcake wackos to own DISNEY, the FAMILY CHANNEL, THE LEARNING CHANNEL, NICKELODIAN etc. Talk about BRAINWASHING OUR CHILDREN! And they are the ones worried that PUBLIC BROADCASTING NETWORKS might ACTUALLY teach them something USEFUL!
The POINT IS, that NO corporation, regardless of WHO RUNS THEM or HOW MUCH THEY CONTRIBUTE TO CAMPAIGN FUNDS should be exempt FROM THE LAW, especially when THAT LAW is there to PROTECT THE PEOPLE!
Like it OR NOT CONGRESS is there to PROTECT THE PEOPLE and NOT your biggest donors. Just because Congress Has the ability to MAKE THE LAW doesn't make it RIGHT to IGNORE the law once it's MADE INTO LAW to further your own careers or pad the bank accounts of your favorite donors. AND just because you have the right to make BRIBERY OF CONGRESS LEGAL you can't ever make it RIGHT OR JUSTIFIABLE. The MISERY you cause to the rest of us, who your LIVELIHOOD depends on, along the way, will NEVER be RIGHT.
Just exactly why do you thing bribery should be legal if Congress does it but illegal if others do it JUST because YOU label it LOBBYING?
Lobbying by itself IS okay, but when you take billions, collectively from corporations and then GIVE THEM WHATEVER they WANT against what's best for the COUNTRY, that is bribery and the PEOPLE who have NO CHANCE of meeting the PRICE the corporations can pay LOSE EVERY TIME.
Comment posted October 19, 2009 @ 5:58 pm
“What I want to know is WHO GAVE insurance companies the exemption from anti-trust laws in the first place”
I'm thinking, the same establishments that currently allow the Church of Scientology and all the big time “faith healers” to operate under the umbrella of “religious tax-exemption.”
Comment posted October 19, 2009 @ 8:53 pm
I am very proud of the congressional leaders that are spearheading this debate and subsequent law of healthcare. This is something we as Americians are watching very closely. Wow Americians helping Americians what a concept. Now listen please I don't have a prroblem with companies making a profit in fact I incourage this, I am self-employed. Only with me If I make mistakes I have to pay for them, also we have lost track of the definition of profits. We as a country strecht them to the point of breaking,(ethics,morals,standards of living,marriages,children,homes,friendships,ect……). Why we continue over and over to do this I don't know. I am 50 yrs. and we have been up,down,in and out of recessions,depressions,obsessions,stocks tumbleing,markets collasping most of my life one conclusion “SELF WILL RUN RIOT”. Set an example get this done it is right (healthcare) try to bring the GOP with you. You don't always have to have the best idea first you know (GOP and/or Dems.) Get it done. Thanks for listening to a layman.
Pingback posted October 21, 2009 @ 11:35 am
[...] Article: Dems vs. Insurance Industry, Round II — Washington Independent Related Posts:Insurance Companies and the Audacity of GreedNo Breakthrough In Talks But [...]
Comment posted October 25, 2009 @ 1:34 am
Maybe now, the path for a level playing field is in sight! I personally would like to see the healthcare insurance industry die a noisy, rattling death, like they have killed many Americans, but that doesn't fit in with free enterprise.
Good local and regional business are dying because of the monopoly the healthcare insurance industry has in a great many states. I'm not saying anything new, here. Cut the teeth from the “Death Squads”, and things will get immeasurably better. You'll see.
Comment posted October 31, 2009 @ 4:26 am
What people really need to understand is that in Washington State, there are many health insurance options for those that are self employed. By law, 92% of all people who apply to health insurance plans in Washington for the self employed must be accepted. Don’t believe everything you read or hear in the Media, there are health insurance options available for the self employed at very affordable rates.
Thanks.
http://www.myhealthinsurancewa.com
Comment posted November 9, 2009 @ 10:33 am
Ugg boots sale
ugg boots cheap
sale ugg boots
Ugg sale boots
Ugg boot sale
bailey ugg boots
Ugg Classic Cardy
UGG Nightfall
UGG Classic Short
classic tall black uggs
ugg 5815
ugg 5819
UGG Rainier Boots
ugg 5245
pink ugg boots
nike
http://www.xiedu168.cn
http://www.uggsmvp.com
Comment posted January 14, 2010 @ 6:43 pm
The savings or additional costs from a public sector health care insurer is only slightly related to the average profit per policy in the private sector.
The real issue is whether there are any efficiencies (such as economy of scale) that can be realized or whether the public option will be less efficient.
Comment posted January 14, 2010 @ 11:43 pm
The savings or additional costs from a public sector health care insurer is only slightly related to the average profit per policy in the private sector.
The real issue is whether there are any efficiencies (such as economy of scale) that can be realized or whether the public option will be less efficient.
Comment posted August 4, 2010 @ 2:26 am
Good local and regional business are dying because of the monopoly the healthcare insurance industry has in a great many states. I'm not saying anything new, here. Cut the teeth from the “Death Squads”, and things will get immeasurably better.
Comment posted August 20, 2010 @ 3:16 am
and things will get immeasurably better.
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
