CONYERS: Statement for the Markup of H.R. 372, the “Competitive Health Insurance Reform Act of 2017”

Dean of the U.S. House
of Representatives
John Conyers, Jr.

I support H.R. 372, the “Competitive Health Insurance Reform Act of 2017,” which repeals the antitrust exemption in the McCarran-Ferguson Act for the health insurance business. 

For many years, I have advocated for such a repeal and so I am pleased to see bipartisan support for this position. 

My own bill, H.R. 143, the “Health Insurance Industry Antitrust Enforcement Act of 2017,” would similarly repeal the McCarran-Ferguson antitrust exemption for the health insurance business.

It does so for price-fixing, bid-rigging, and market allocation, the most egregious kinds of anticompetitive conduct.  Additionally, my legislation would repeal the exemption for the business of medical malpractice insurance, as this would be another key component of ensuring competition in health care markets.

There are several important reasons why Congress should repeal this antitrust exemption.

To begin with, there is no justification for such a broad antitrust exemption for the business of health insurance.

Congress passed the McCarran-Ferguson Act in response to a 1944 Supreme Court decision finding that the antitrust laws applied to the business of insurance.

Both insurance companies and the states expressed concern about that decision. Insurance companies worried that it could jeopardize certain collective practices like joint rate-setting and the pooling of historical data.  And, the states were concerned about losing their authority to regulate and tax the business of insurance.

To address these issues, McCarran-Ferguson provides that federal antitrust laws apply to the business of insurance only to the extent that it is not regulated by state law which has resulted in a broad antitrust exemption. 

Industry and state revenue concerns, rather than the key goals of protecting competition and consumers, were the primary drivers of the Act.

In passing McCarran-Ferguson, however, Congress initially intended to provide only a temporary exemption and unfortunately gave little consideration to ensuring competition. 

Not surprisingly, 3 Commissioners observed in the 2007 Antitrust Modernization Commission Report that McCarran-Ferguson should be repealed because it has “outlived any utility [it] may have had and should be repealed.” And, another Commissioner stated that the Act is “among the most ill-conceived and egregious examples” of antitrust exemptions and that its repeal “should not be delayed.”

Given the foregoing, I would encourage the Committee to consider a full repeal of the McCarran-Ferguson antitrust exemption in the future.

Antitrust exemptions should be exceedingly rare and should be enacted only where strong policy reasons support such exemptions.

It is far from clear that the McCarran-Ferguson antitrust exemption was ever fully justified, and while I support repealing that exemption for health insurance, it would be worth the Committee’s time to look beyond the health insurance sector.

For example, my bill would have also repealed the Act’s antitrust exemption for medical malpractice insurers, given that a lack of competition among such insurers is one of the reasons for high medical malpractice premiums.

Finally, repeal of the McCarran-Ferguson antitrust exemption for the business of health insurance is a complement, not an alternative, to the Affordable Care Act.

Repealing McCarran-Ferguson, alone, will be insufficient to help patients and other health care consumers obtain affordable health insurance.

We should remember that the House included language almost identical to H.R. 372 in its version of the Affordable Care Act.

This is not an “either/or” situation.  We need both measures to be in place to maximize benefits, improve quality, and lower prices for consumers.

Nonetheless, I support this legislation and urge the Committee to report it favorably.

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