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Malpractice Insurers Prepare For Antitrust Battle

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WASHINGTON BUREAU — Medical malpractice insurers are gearing up to keep Senate Democratic leaders from stripping away their McCarran-Ferguson Act antitrust exemption.

Senate Majority Leader Harry Reid, D-Nev., spoke last week at a Senate Judiciary Committee hearing on behalf of S. 1681, a bill introduced by Sen. Patrick Leahy, D-Vt., that would repeal exemption both for health insurers and for medical malpractice insurers.

President Obama suggested Saturday during his weekly address that he personally would like to see the antitrust rules get more attention.

Health insurers are “rolling out the big guns” in a “last-ditch effort to stop reform,” Obama said. “And they’re earning these profits and bonuses while enjoying a privileged exception from our antitrust laws, a matter that Congress is rightfully reviewing.”

Lawrence Smarr, president of the Physician Insurers Association of America, Rockville, Md., said Obama’s comments confirm medical malpractice insurers’ view that the Senate plans to act on the antitrust issue.

Last week, when Reid declared at the Senate Judiciary Committee hearing that, “It is time to pass this legislation and pass it now,” that was a “pretty strong statement,” Smarr says.

The Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee have both approved major health bill proposals. Reid and others now are trying to draft the version that will go to the Senate floor.

Smarr and others in the insurance industry doubt that S. 1681 will be basis for the antitrust provision in the Senate Democratic leaders’ version of the health reform bill.

But “we believe that Sen. Reid will declare such an amendment in order for Senate floor action,” Smarr says.

PIAA members are assuming that Senate floor debate on a health bill could start as early as next week, and that an antitrust repeal provision will be offered as an amendment during floor debate, Smarr says.

PIAA are trying to get a jump on action, by writing letters to all members of the Senate in opposition to antitrust repeal, Smarr says.

The House version of S. 1681 is H.R. 3596.

The PIAA does not believe support for antitrust repeal for health and medical malpractice insurers is as strong in the House as it is in the Senate, Smarr says.

“What I don’t think the president and Congress understand is that medical liability insurance is primarily offered by small, physician-owned specialty carriers, and that they have no incentive to gouge their owners or customers,” Smarr says. “There is a feeling, as voiced by the president, that repealing McCarran-Ferguson is going to reduce health care costs, but in reality the only demonstrated legislative solution is tort reform.”

Only 135 insurers sell medical malpractice insurance, and physician-owned medical malpractice insurers insure about 60% of America’s doctors, Smarr says.

America’s Health Insurance Plans, Washington, says the attack on the McCarran-Ferguson antitrust exemption is the result of an inaccurate interpretation of the law.

“McCarran-Ferguson has nothing to do with competition in the health insurance market,” AHIP spokesman Robert Zirkelbach says. “The focus on this issue is a political ploy designed to distract attention away from the real issue of rising health care costs.”