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AIA: New Health Bill Antitrust Provision May Be A Trap

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WASHINGTON BUREAU — An antitrust provision added to H.R. 3962 earlier this week looks harmless, but it could cause big problems.

Blain Rethmeier, a spokman for the American Insurance Association, Washington, says the AIA believes the new language, included in the “manager’s amendment” to H.R. 3962, the Affordable Health Care for America Act bill, would fix one set of problems but create new problems.

The amendment was offered by Rep. John Dingell, D-Mich., chairman-emeritus of the House Energy and Commerce Committee.

Like earlier health bill antitrust provisions, the provision would limit the ability of health and medical malpractice insurers to use the antitrust exemption in the McCarran-Ferguson Act. The latest version of the provision states that, “Nothing contained in this Act shall modify, impair, or supersede the operation of any of the antitrust laws with respect to the business of health insurance or the business of medical malpractice insurance.”

Safe harbor clauses would provide exceptions for “collecting, compiling, classifying, or disseminating historical loss data; determining a loss development factor applicable to historical loss data; or performing actuarial services if doing so does not involve a restraint of trade.”

Unlike the earlier versions of the antitrust repeal language, the latest version does not introduce new, undefined statutory terms such as “price-fixing” or “market allocation,” Rethmeier says.

But the latest provision would let federal antitrust laws broadly apply to the “business of health insurance or the business of medical malpractice insurance,” Rethmeier says.

“While the new language eliminated one issue caused by the use of new statutory terms, it replaced it with more sweeping language for these two lines of insurance,” Rethmeier says.

The latest version also fails to provide any express state regulatory exception, other than, presumably, the availability of the Parker vs. Brown state action doctrine, and the language could expand the scope of antitrust repeal beyond those “engaged” in the business of health or medical malpractice insurance, Rethmeier says.

Moreover, he says, the “very narrow” set of safe harbors contained in the new language “appear to offer little protection” to underwriters of health or medical malpractice insurance.

The new language would give the Federal Trade Commission express enforcement authority over “unfair methods of competition,” and it “is even more objectionable, if that is even possible,” than the old language, Rethmeier says.

Michael Stinson, director of government relations at the Physician Insurers Association of America, Rockville, Md.., says he shares the AIA’s misgivings about the new antitrust provision.

“We do believe the legislation has been made more broad than it was previously,” Stinson says. “It opens up more opportunity for legitimate insurance industry practices to come into question.”

The PIAA “is certainly going to communicate to members of Congress our concern about the language and encourage them to change or delete this provision,” Stinson says.