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Repealing McCarran-Ferguson?

This from Greg Scandlen:

Repealing McCarran-Ferguson?

It’s all enough to make you wonder if these jokers have any idea what they are doing but then they pass another bill and remove all doubt. The most recent is the so-called antitrust bill against health insurers. The House passed HR 4626 on February 24 to exempt health insurers from the McCarran-Ferguson Act. For a while it looked like they were going to repeal McCarran-Ferguson altogether, but the P&C industry informed them that it, too, was subject to Mc-F.

OH! Well we’re not mad at the P&C industry. We just hate those eeeeevil health insurers.

A notice from the National Association of Insurance and Financial Advisors (NAIFA), expresses concern that forbidding the pooling of historical claims data would disadvantage smaller carriers and decrease competition, and that “health insurance was not defined by the bill. The upshot of that could be that LTC, DI, medical provisions in auto insurance and even some aspects of life insurance could be construed by courts to be “health” insurance.” NAIFA believes the latter concern was fixed but not the former one. It is not at all clear that there is support in the Senate for this legislation.


McCarran-Ferguson  is poorly understood even by otherwise bright people. On the MSNBC show Morning Joe, Joe Scarborough said it allows price fixing between insurers. No, it doesn’t — as explained by National Underwriter, which writes, “the current antitrust exemption gives (insurers) no ability to join together to set prices or use acquisitions to build monopolies.” Insurers have always been subject to most federal antitrust provisions, including bans on price fixing, divvying up markets, and tying arrangements. They are also completely subject to state antitrust laws. As NAIFA points out, the only thing that will be affected here is the ability of carriers to pool claims data for actuarial purposes. The result will be that small carriers won’t have enough historical information to project future costs. So they will not be able to determine how to price their products. So they will go out of business. So there will be less, not more, competition in the health insurance market.

These people seriously don’t know what they are doing.

National Underwriter


March 4, 2010 - Posted by | Federal Government, healthcare, insurance | , ,

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