Antitrust exemption for insurers a red herring

By GottaLaff

This subject is so not my strong suit, but I found this piece by Michael Hiltzik to be fascinating:

My question was: What idiots exempted health insurers from antitrust law in the first place?

The answer, of course, is Congress. [...]

Yet the McCarran-Ferguson Act turns out to be a red herring [...]

[T]he McCarran-Ferguson Act has done almost nothing to foster the consolidation of the health insurance industry. For one thing, health insurers don't typically share data in the manner that the exemption allows. Moreover, the courts have interpreted the law so narrowly that it doesn't exempt insurance mergers from federal scrutiny.

The real culprits are federal antitrust authorities, whose approach to health insurance mergers can best be described as supine. In other words, the truly effective antitrust immunity the industry has received has come not from lawmakers but from federal regulators.

As David Balto, an antitrust attorney working for the liberal Center for American Progress, told Congress in 2008, over the previous 10 years there had been more than 400 health insurance mergers. Only two drew challenges from antitrust regulators at the Department of Justice.

Federal officials had also failed to bring cases alleging other anti-competitive behavior by health insurers, Balto said. [...]

All this suggests that in focusing on the McCarran-Ferguson exemption, Congress is barking up the wrong tree. Repeal of the measure wouldn't have much effect on health insurers at all, good or bad, though it would permit Congressmen to swank around as though they were courageously lowering the boom on an industry with few fans among the voters. [...]

Why would Congress want to hurt them, anyway -- a group that has funneled more than $3 million into congressional campaign coffers via its biggest political action committees over the last three election cycles? [...]

Sure, let Congress repeal McCarran-Ferguson -- antitrust experts say it's outdated anyway. But just remember that if the repeal distracts the lawmakers from real antitrust reform, as seems likely, the health insurance industry will be laughing all the way to the bank.