Bob Franken

Health Care’s Pre-Existing Condition


The Democrats have just fired their biggest guns at the insurance industry but unfortunately they are shooting very loud blanks.

That’s what they did Wednesday, when the the Senate Judiciary Committee held a hearing entitled “Prohibiting Price Fixing and Other Anticompetitive Conduct in the Health Insurance Industry.” The target is the McCarran-Ferguson Act.

There is no way in the world that the insurance companies are going to allow Congress to repeal McCarran-Ferguson, even though it really does allow their. “Price Fixing and Other Anticompetitive Conduct…” The insurance industry is the only one, other than Major League Baseball that gets a pass from anti-trust enforcement.

But don’t expect the majority in Congress to play ball with those who are serious about getting rid of that exemption, even though the ever-quotable Sen. Chuck Schumer called it “…one of the worst accidents in American history…”

It was no accident at all. The McCarran Ferguson Act has been with us since 1945 when when the industry got Washington’s willing lawmakers to reinstate the industry’s immunities from federal regulation after the Supreme Court, a year before, had overturned the apple cart of special treatment insurers had gotten since right after the Civil War.

Because of McCarran-Ferguson they must regulated state-by-state which is an ineffective patchwork, compared to one national set of standards.
The result is the insurance behemoths don’t have to pay attention to the anti-trust restrictions that prevent normal companies from colluding and engaging in their their other anti-competitive practices.

That’s why Americans can’t take their business elsewhere when their health insurer cheats them. There are no real alternatives. When it comes to abusive practices, the companies are allowed to all be in this together.

Understandably, they cherish this exemption. Since it has meant they could accumulate limitless wealth, all they will have to do is shower a little bit of it into the campaign coffers of this generation’s pliant politicians and they will keep the advantage that lies at the heart of health care dysfunction in this country.

As we have heard ad nauseum, another way to achieve competition would be some variation of a public option. Of course, the industry is dead set against that idea too and can be expected to spend whatever it takes to distort the issue. However, there is one hint of their vulnerability.

It appears that maybe these guys are not as smart as they think they are. For instance, by putting out their blatantly misleading analyses of pending reform legislation, they were so shameless with their distortions that they insulted the members of Congress, who don’t want to be treated like fools, whether they are or not.

So some variation of the public option is back on the table. But forget about repealing McCarran-Ferguson. It won’t happen. The Democrats who threatened that were only being spiteful. But they did a service by bringing it up and displaying how it is the insurance companies can pretty much do whatever the hell they want to.

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