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House Committee Votes To End Heath Insurance Anti-Trust

A House committee has voted to strip the health insurance industry of its exemption from federal antitrust laws as senators announced plans to take the same step.

Healthcare coverage and the hastle of forms
Healthcare coverage and the hastle of forms

The moves Wednesday signaled a growing determination by Democrats to punish the insurance industry for its criticism of President Barack Obama's health care overhaul agenda.

The House Judiciary Committee voted 20 to 9 to repeal a 1940s law that exempted the health insurance industry from federal controls over certain antitrust violations including price-fixing.

Lawmakers said they wanted to include the legislation in a larger health care overhaul bill taking shape in the House. In the Senate, Majority Leader Harry Reid announced plans to repeal the antitrust exemption as part of its health care legislation.

If enacted, the switch would mean greater federal regulation for an industry that recently has stepped up its criticism of portions of a health care bill moving toward the Senate floor.

In a statement, the major industry trade group, America's Health Insurance Plans, said the industry already was one of the most regulated in the country. The focus on the industry's antitrust exemption, it said, was "a political ploy designed to distract attention away from the real issue of rising health care costs."

The move against the antitrust exemption came as Obama appealed to congressional Democrats not to let internal differences sink his comprehensive plan to remake the nation's health care system. "The bill you least like" improves coverage for millions, he said in New York. "Let's make sure that we keep our eye on the prize."

After months of struggle, Democratic leaders in the House and Senate hope to have legislation ready for votes in both houses within a few weeks, and plan on having a compromise measure ready for Obama's signature by the end of the year.

Progress has been slow, particularly as Democrats squabble over whether to allow the federal government to sell insurance in direct competition with private insurers, and if so, under what terms. Obama's remarks appeared an attempt to place that and similar disagreements in a larger context -- a decades-long attempt to provide insurance for millions who lack it while cracking down on insurance industry practices such as denying coverage on the basis of pre-existing medical conditions.

Insurance industry officials have been involved in discussions for months with the White House and key congressional Democrats over proposed legislation. They repeatedly said they would accept a series of new restrictions, as long as the legislation required Americans to purchase insurance, thus assuring insurers millions of new customers.

The tone changed last week after the Senate Finance Committee approved legislation that exempted an estimated 2 million individuals from the requirement to purchase insurance and greatly reduced the penalties on those still subject to the requirement.

In a report paid for by the insurance industry, the accounting firm PricewaterhouseCoopers said the legislation would add $1,700 a year to the cost of family coverage in 2013 when most of the major provisions of the Senate Finance Committee bill would be in effect.

The White House, Democrats in Congress and other supporters of the legislation attacked the study as flawed and deceptive.

Within a few days, Leahy convened a Judiciary Committee meeting to air the possibility of revoking the industry's antitrust exemption.