As Committee Chairman Patrick Leahy (D-Vt.) explained at the hearing, the health insurance industry — unlike any other private industry in the country — is allowed to engage in price fixing, bid rigging and market allocation, all of which would violate the law if any other sort of company did it. Last month Leahy introduced the Health Insurance Industry Antitrust Enforcement Act of 2009, which would repeal the antitrust exemption for health insurance and medical malpractice insurance providers. Sens. Harry Reid (D-Nev.), Dianne Feinstein (D-Calif.), Russell Feingold (D-Wis.), Charles Schumer (D-N.Y.), Richard Durbin (D-Ill.), Arlen Specter (D-Pa.) and Al Franken (D-Minn.) are co-sponsors.

Although Lawrence Powell, a professor at the University of Arkansas, testified on behalf of the Physician Insurers Association of America in support of continuing the antitrust exemption, even he struggled to explain why it makes sense. He repeatedly said that allowing insurers to share data on losses and costs of claims helps insurance companies price their services accurately and competitively. But as Leahy made clear in his questioning, his legislation would not prohibit such data-sharing. That led Powell to stumble and say that while he’s “not an attorney,” his understanding was that insurance companies would have to file a request to pool data, which would impose additional costs.

But Robert Hunter, Director of Insurance for the Consumer Federation of America and former Federal Insurance Administrator under Presidents Ford and Carter, saw it differently. In his view, the antitrust exemption, intended initially to be temporary but made permanent during closed-door conference committee sessions of Congress more than 50 years ago, must be repealed to overcome the insurance industry’s anticompetitive practices that have led to higher prices and reduced services. “It is high time that insurers played by the same rules of competition as virtually all other commercial enterprises operating in America‘s economy,” he testified.

According to Hunter, health insurance companies have been able to consistently pay less on claims by agreeing to lower the amounts they reimburse doctors and hospitals for services; adopting similar clauses in their contracts that limit their liability in unfair and abusive ways; agreeing to cut back coverage to certain places, and using similar claims processing systems designed to systematically underpay claims.

As Hunter testified, federal authorities have recommended eliminating or cutting back the antitrust exemption for health insurers and medical malpractice insurers on at least four different occasions after studying it. But Congress has never taken that step, presumably due to the power of the insurance industry lobby.

With the soaring cost of health care now in the spotlight, this may finally be the right time.

So far, much of the debate is focusing on whether and to what extent the law should be focused on investigations of foreign terrorists, as opposed to being open to be used for ordinary domestic law enforcement. Given that the Patriot Act was passed after the 9/11 terrorist attacks to prevent another one, Sens. Richard Durbin (D-Ill.), Russ Feingold (D-Wisc.) and Arlen Specter (D-Pa.) have all come out strongly in favor of requiring some nexus to international terrorism.

Sens. Dianne Feinstein (D-Calif.), Patrick Leahy (D-Vt.), Jeff Sessions (R-Ala.), Sheldon Whitehouse (D-R.I.), Jon Kyl (R-Ariz.) and others all appear to be leaning towards the view of the FBI and Justice Department, which has told the senators in classified sessions that the broader versions of the Patriot Act provisions are necessary to combat terrorism.

The bill, which would allow employees to form a union if they can gather signatures from a majority of workers, rather than being required also to hold a formal election weeks after collecting the signed cards, is virulently opposed by business groups, who fear they’ll lose the ability to sway workers against the union option. (The law would also increase penalties against employers who mistreat workers for trying to unionize.)

According to OpenSecrets, “Business [Political Action Committees] not only gave nearly five times more in campaign contributions than labor PACs did in the last election cycle ($365.1 million versus $77.9 million, including contributions to leadership PACs) they are backed by the U.S. Chamber of Commerce, which spent $144.4 million on lobbying efforts in the 2007-2008 election cycle, or more than $400,000 for every day Congress was in session. By contrast, the entire labor sector spent less than $84 million on lobbying efforts during those two years.”

All that lobbying by big business has certainly won the support of some Republicans, who have conveniently misrepresented the bill as “taking away the secret ballot” from employees — as opposed to offering them another, far simpler option for how to form a union.

For example, at a fundraising stop Monday in his home state, Sen. Arlen Specter (R-Pa.) said that “jobs are being exported. We have problems with pensions and health care. To take away the secret ballot is big stuff. I’m listening to all of the viewpoints very carefully. I have a hunch we’ll vote this spring.”

And Sen. John McCain (R-Ariz.) called it “a threat to one of the fundamentals of democracy.”

Meanwhile, some Democrats who’ve supported the bill in the past aren’t signing onto it now. Even key Senate Democrats are wavering in their support, The Wall Street Journal reports.

That’s likely because it’s so easy to distort what the bill says, and why. As Rachel Maddow explained on her MSNBC show the other night, in the most coherent and straightforward discussion I’ve heard yet of this bill, the purpose of the Employee Free Choice Act is to allow employees to form a union without having to endure weeks of intimidation by their bosses. The “card check” option, as it’s called, means employees can just sign a card to vote for the union, if they want to do that. (As Maddow explains, contrary to the Republicans’ claims, the law explicitly allows them to have a secret ballot, too, if they want one.)

Employees might want to go with the card check because traditionally, after the cards are signed, an employer gets several weeks in which it can campaign against the union, often by intimidating employees who might want to sign up. As a former labor lawyer and a former employee at a company where some of us signed cards to form a union, I can attest that the boss immediately starts sending letters and emails to employees listing all the terrifying things that are likely to happen when they join — including that they could all be fired. Since employees are a captive audience to the boss, they get to hear lots and lots of this reasoning.  And eventually, many are too scared to vote for the union, despite that sacred secret ballot.

The Employee Free Choice Act tries to swing the pendulum back a bit, so employees can make a choice without intimidation. Card check has long been an option under the National Labor Relations Act, but the law gave employers the right to veto it, and increasingly, that’s just what they’ve done.

For a more thorough explanation, including how the labor law actually applies to a unionizing battle at a Rite Aid in Lancaster, Calif., check out this story on Truthout from David Bacon.

“it’s a little hard for me to see how you came to the conclusion you did,” Specter opened. “Conceding the fact that none of us is perfect.”

Holder reiterated that the incident was not “typical of the way I have conducted myself.”

Holder said he wasn’t aware of the record Rich had, and Specter seemed generally dissatisfied with Holder’s answers. Holder reiterated that the incident was not “typical of the way I have conducted myself.”

If Specter is the boogeyman of the hearing, this was a fairly weak showing, I’m curious to see which minority member will start in on FALN and Elian Gonzalez.

Here it is, after the jump:

The Honorable John W. Warner
Former United States Senator from Virginia

The Honorable Eleanor Holmes Norton
Congresswoman from the District of Columbia

Panel I:

Eric H. Holder Jr. to be Attorney General of the United States

Panel II:

The Honorable Louis J. Freeh
Former Director
Federal Bureau of Investigation

Chuck Canterbury
National President
National Fraternal Order of Police

John Payton
President and Director-Counsel
NAACP Legal Defense and Educational Fund, Inc.

Frances M. Fragos Townsend
Former Homeland Security Advisor to President George W. Bush

Joseph F. Connor
Glen Rock, NJ

Richard S. Hahn
R. Hahn & Company
Seal Beach, CA
Former FBI Special Agent

Stephen P. Halbrook
Attorney At Law
Fairfax, VA