DeGette targets insurance companies
DeGette targets insurance companies
September 21, 2009
By: Peter Marcus
Congresswoman Diana DeGette has introduced legislation that would repeal an antitrust exemption for health and medical malpractice insurance companies.
DeGette targets insurance companies
September 21, 2009
By: Peter Marcus
Congresswoman Diana DeGette has introduced legislation that wouldrepeal an antitrust exemption for health and medical malpracticeinsurance companies.
"As health insurance premiums continue to go through the roof, now is the time to ensure that health insurance companies are not engaging in anti-competitive behavior that make it more difficult for Americans to get health coverage," she said.
The Health Insurance Industry Antitrust Enforcement Act would repeal the McCarran-Ferguson Act exemption from antitrust violations, including price fixing, bid rigging and market allocations.
Anthem Blue Cross and Blue Shield in Colorado says health insurance companies are already taking action on their own to lower costs and increase care.
"Health insurance companies already operate in a competitive environment and work to develop innovative solutions and products to help reduce health care costs for members," said John Martie, president of Anthem Blue Cross and Blue Shield in Colorado.
The insurance company points out that it has already recommended reform that eliminates pre-existing conditions to bring everyone into the pool; coupling subsidies to low- and middle-income individuals to purchase coverage; a commitment to end ratings based on geography, gender and age; and improving affordability.
"It's also a bit contradictory that at the same time the congresswoman continues to promulgate the false premise that health insurers need more competition, that her legislation focuses on ‘subjecting health insurers and medical malpractice insurers to the same good-competition laws that apply to virtually every other company doing business in the United States,'" added Martie, who cited a news release by DeGette announcing the legislation.
Anthem Blue Cross and Blue Shield in Colorado points out that 87 cents of a member's premium dollar goes to pay for medical expenses; at least 8 cents is spent on operating expenses; and the remaining five cents goes toward the company's profit margin.
Critics of DeGette's proposal believe it would do nothing to foster a competitive market.
Instead, they would like to see lawmakers push ideas like allowing for inter-state sales of health plans.
Jon Caldara, president of the libertarian Independence Institute, said inter-state health insurance commerce would quickly lower premiums.
"If you really want to hack off the insurance companies and force competition, allow us to buy policies across state lines," he said.
The argument is that not all states impose similar laws on insurance companies. One state might not require consumers to purchase certain minimum plans, which would mean it would be cheaper for consumers to purchase health insurance in those states.
"It would quickly lower costs and quickly increase options," said Caldara.
Jeff Crank, state director of conservative-leaning Americans for Prosperity, agreed that competition through less mandates is the better option.
"I think to solve health care, don't go after health insurance companies, instead provide a free market where they can go after each other in a competitive environment," he said. "That would do much more than trying to pass laws that restrict what health insurance companies can do."
But Michael Huttner, executive director of the liberal ProgressNow organization, said going after the insurance companies themselves really is the best way to begin achieving reform.
"For far too long they've been not only denying people unfairly for critical health decisions, but they've been making huge profits on it," said Huttner, co-author of a new book, "50 Ways You Can Help Obama Change America," which addresses a grassroots effort to pass comprehensive health reform.
DeGette points out that in Colorado, health insurance premiums have increased 75 percent between 2000 and 2007.
"Families across our nation — including those in Colorado — are feeling the pinch in their budgets from having to keep up with rising insurance rates," said the congresswoman. "Simply put, the bottom lines of the big insurance companies should not be put above the American public's ability to gain access to health care."