This seems like good news:
The House Judiciary Committee on Wednesday approved a bill that would curb the health insurance industry’s limited exemption from federal antitrust laws and would allow Justice Department enforcement in the areas of price-fixing and market allocation.
The approval of the bill by a vote of 20 to 9, with three Republicans joining 17 Democrats in favor of the measure, is the latest sign that Congress is intent on cracking down on perceived abuses by health insurers.
I’ve heard reports that this is “retaliation” for the health insurance companies reneging on their deal, but it just seems to me like something that should be done anyway. Why shouldn’t they be forced to compete? Why should they be allowed to engage in price-fixing?
DBrown
Health insurance companies compete? That, that’s so unfair and … well, unfair. How can they run huge profits if they compete? This is an outrage! Next, we will have the banks regulated!
demkat620
Yeah I like the idea but I’m sure Aetna and Cigna are calling all their lapdogs right about…now.
r€nato
Until recently, I had no idea that they had an anti-trust exemption.
But it could turn out to be a good thing that they have it… so it can be used as leverage against them.
Nice to see Democrats fighting back, against these jagoffs and also against Fox News Channel.
now that I have posted on-topic… have you guys and gals heard about ESPN baseball analyst Steve Phillips? Seems he made a bad decision in his choice of young ladies to carry on an affair with, namely a certain 22-year-old production assistant who actually fell for the, “I’m in a loveless marriage” crap and the, “I’m going to dump my wife and kids and house and all my other assets/investments to be with you” crap and then got all butthurt when it turned out to be bullshit.
Her letter to his wife is here, and boy is it a DOOZY.
I don’t think there’s any way Steve is talking his way out of this one after that letter… and buying his way out of it is going to be very expensive…
General Winfield Stuck
It’s been around since 1945, so I kind of wonder if this will make it through the Senate on it’s own without some parliamentary trickery, though it makes sense that it should.
It will for sure get the HC industry attention and maybe get them to tone back their efforts to scuttle health care reform. That seems to be the purpose of dems pushing it, but maybe they are serious about revoking it. Time will tell.
r€nato
@DBrown:
once again, capitalists are all for the free market and getting gummint off their backs… so long as the gummint is there to give them an assist when they need it.
Must be nice to eat your cake and have it too.
smiley
Because they were. You answered your own question.
WyldPiratd
Because they’ve been buying off Congress Critters in both parties for decades.
/SATSQ
The Bearded Blogger
I like this A LOT… I hope it goes through and it isn’t an empty threat… I specially like it because free market republicans will need to take it up to 12 in order for their opposition to seem reasonable.
I’m picturing monopoly boards with John Boehner instead of monopoly guy…
Keith G
And it’s not like a ‘lil retaliation can’t be a good thing.
Keith’s Collarary:
Keep your friends close and your enemies knee-capped.
Wile E. Quixote
@John Cole
1) Because if you don’t allow them to engage in price-fixing they’ll go Galt and nobody will have health insurance and we’ll all die, just like Stephen Hawking would have if he were covered by the NHS.
2) Because not allowing large corporations run by rich white guys to do whatever they like will fill Conservative Baby Jeebus with butthurt.
3) Because doing so will cause Michael Steele to announce that he is the cow on the tracks in front of the train that is limiting anti-trust exemptions for health insurance companies.
beltane
Monopolies are never good for the consumer. I wonder why the insurance companies received this exemption in the first place.
SiubhanDuinne
@r€nato: The letter must be a doozy. My firewall won’t even let me see it!
Wile E. Quixote
Oh, and you know who else enforced anti-trust laws against huge companies? Hitler! Well, no he didn’t.
beltane
@Keith G: All those hundreds of thousands of Americans who have been killed and bankrupted by our pathetic excuse for a health care system deserve a bit of vengeance. It’s about time the Democrats bring a gun to a gun fight; usually they bring a plastic butter knife.
ChrisWWW
The argument I heard… I don’t remember where, and I don’t necessarily buy it… is that the price-fixing exemption helps smaller insurers properly set their prices and benefits based on the risk data from the bigger insurers. The big insurers have a larger pool of customers and therefore better data.
Wile E. Quixote
@Keith G
I’m more into “Keep your friends close and dump your enemies into a pit full of quicklime”. But too each their own.
The Bearded Blogger
@beltane: Mor elike one of those cartoon guns that shoot out a sign that says “bang”… or in this case, “strongly worded letter”
@beltane: It really is fucking insane… I wonder who made that into law, and why… too lazy to google, though….
joes527
So this is a question, not a defence of the status quo.
Is the anti trust exemption in any way linked to the limitations on selling across state lines?
“You can’t go national, so if you are really big in this state then that is OK”
I think that taking the anti trust exemption is a good thing, but if the next logical step is to remove the “selling across state lines” restrictions without adding strong federal regulations first, this could be a frying pan/fire situation.
Comrade Jake
@r€nato:
Holy shit. Gotta love the line where she says she was raised Catholic too. I thought that was a nice touch.
SiubhanDuinne
@demkat620: Have you seen very much of the former Cigna executive who decided to go rogue on the insurance industry? I can’t remember his name just offhand but he’s been on a lot of programs pushing hard for a public option and really blowing a lot of whistles on his former employer. I don’t think I’ve heard him discuss anti-trust exemptions per se but he can be scathing about the kinds of things insurance companies do to bulk up their bottom lines with absolutely no compassion for the patient or patient’s family.
He shows up on Keith/Rachel every now and then, and he’s always worth watching.
Wendell Potter, that’s his name! Just remembered!
Hugh
I’ve been searching Matt Yglesias and Ezra Klein (well, not them personally) on this. I have a vague sense that one of them wrote on wrote that changing the rules regarding anti-trust for health insurance companies is more complex than it would seem. But I’m not coming up with anything. Might be a good question to ask Klein in one of his Thursday noon chats. And tomorrow is Thursday!
freelancer
@r€nato:
Steve isn’t the smartest guy, but the girl Brooke strikes me as a fucking moron. I feel bad for the wife.
r€nato
@SiubhanDuinne:
it’s one of those documents you have to view in a special document viewer plug-in. I don’t have other sources sorry, but if you google for it I bet you find it.
I don’t know how to begin to describe the letter. She mentions the special birthmarks he has in his groinal region, and all the terrible things he said to her about his marriage, and on and on and on. It is almost literally jaw-dropping.
BombIranForChrist
For me, I don’t mind if it is a little bit of both / and.
It is both a great idea and a giant fuck you. I honestly think that the government, as an institution, needs to remind people how much power they really have. I personally think this power should be used sparingly, but the government IS the voice of the people, a very angry people currently, and it’s good to occasionally remind pretenders to the throne that the ultimate power is still with the people.
r€nato
@freelancer:
moron? That’s a good place to start. She’s 22 so it never occurred to her that she just nuked her own career as well. ESPN probably can’t fire her, but she won’t be going anywhere beyond production assistant (glorified gofer) there, and good luck putting ESPN on your resume when looking for another job. Not to mention, now everyone knows who she is and that she is f’ing insane in the membrane (and not in the good way).
valdivia
@r€nato:
omfg that letter is something. i can’t stop laughing. The texting part was pretty funny too.
r€nato
@freelancer: “Moron” fits Phillips better than Hundley. I hear this is not the first time he has had an affair, I guess he did it when he was with the Mets some years back. He had so much to lose and he just threw it all away on a fling with a 22 year old.
As far as his wife… she already announced today that she is divorcing him. Don’t feel too sorry for her, she got rid of her cheating, lying husband and she’s going to get half of everything plus the kids plus alimony and child support. I’m sure she’ll be just fine once she’s past all the ugly business of the actual divorce.
r€nato
@valdivia: isn’t it amazing? I just keep saying, “holy crap” to myself as I read it.
valdivia
@r€nato:
That letter is an instant classic. I had to read it a few times to get the fullness of its awesomeness. That guy is truly really screwed.
Leelee for Obama
@SiubhanDuinne: He’s doing a commercial trashing the Baucus Bill for Move-on or HCAN. I see it a few times a day, if I keep the cable news on.
Little Macayla's Friend
Totally OT, and I already mentioned this in the previous post, but the BJ post about ‘Who Is the Real Obama’ is mentioned in the Kos midday open thread for today (Pfft):
http://www.dailykos.com/story/…..pen-thread
Maybe there is time for someone with an account for commenting at DKos to put in a plug over there to suggest / explain voting for Bitsy while they’re here?
Or is plugging like that frowned on over there?
Napoleon
Jesus, I am going to have to be the one to defend insurance companies in this thread.
The reason you have an anti-trust exemption for insurance companies is that it allows them to share loss/risk data so that each company, no matter how small or big, can accurately asses risk. Without the exemption doing that would be effectively price fixing. There is a good argument that revoking the exemption screws little insurance companies, therefore shrinking competition.
If they want to stick it to the insurance companies they need a real public option.
Demo Woman
@r€nato: Fatal Attraction anyone? It appears that the Steve and his wife were filing for divorce cuz of the whacko and she did not feel that she was not getting the appropriate attention so gave the NYPost the letter she wrote to the wife. WTF
Calouste
@ChrisWWW:
You know what, if everyone was covered under the same insurance scheme, than that scheme would have even more betterer data. (Funny how economies of scale never seem to apply to the government or other public schemes according to believers of the unregulated market.)
Anne Laurie
@General Winfield Stuck:
Whatever the original legislative intention — and I’m guessing it may have been part of the wage/price control negotiations during & after WWII — it’s pretty clearly devolved into a form of Danegeld for the insurance industry. And perhaps the Obama Administration has noticed that raising the protection money to give the Danes eventually led to a form of national tax structure which would eventually allow the new kings of England to reallocate the funds to fighting the Vikings. If I were Rahm Emmanuel, I’d certainly enjoy painting Cigna and Aetna as berserk looters!
sparky
@Napoleon: don’t think the people who wrote that bill don’t know that (though the reps may not). at the end of this particular sausage fest there will be fewer insurance companies just like there are fewer financial firms. i really really loathe crony capitalism, US style.
Anne Laurie
@Napoleon:
The counter-argument would be that computational technology has increased by a factor of, well, MANY since 1945’s sliderules and keypunch machines. Once a strong public option (which I agree is essential) establishes a nationwide risk databank, insurance companies can use their own proprietary risk models, but they don’t need the “protection” they’re now using to cherry-pick customers and discourage competition.
Laura W
@Little Macayla’s Friend:
Thanks! I found this on google an hour or two ago and it blew me away. Who is this person and how can we thank them profusely? Check out how they handled the comments. Like they’ve been following every thread and comment here for weeks.
Hope the link works. I sent it to Sylvia in email and it wouldn’t click thru for her.
Dog Bless Houston Gardener
Also, too, many thanks to Kevin at Rumproast for pimping our Bitsy today also, too!
Napoleon
@Anne Laurie:
Anne,
Computers are irrelevant. We are talking about the data that goes into the computers. Large insurers internally have a pretty good data base, but if you are a small insure you may have a poor understanding of, say, what kind of claims you may have for Lupus (sp?) so, presumably, they overprice that risk. With the anti-trust exemption the all put their risk experience in a pot, and everyone knows what the over all claims experience is, so even you or I could start our own health insurance company.
wmd
It seems to me that the loss/risk data is aggregated by the Insurance Service Office and that reporting back and forth to that company doesn’t require an anti-trust exemption.
IANAL, and haven’t worked with actuaries/insurance companies for many many years. Just remember writing software to report claim data to ISO a lot of years back.
kommrade reproductive vigor
It might stem from this:
Ohio Mom
Isn’t the problem not that the shared data base gives them general acturial info (“hey, look, people with X cancer generally live only 2 years, even with treatment, and about Y% of the population gets X cancer” — as if that sort of info isn’t already in the medical literature), it’s that the data base contains records of *every* claim *every* one of us has *ever* made, so even if you you don’t remember to write down that you had treatment for acne thirty years ago, they can look it up and drop you for lying to them?
Sasha
Because government interference that ensures fair competition is the ultimate expression of anti-capitalism socialist thought.
SiubhanDuinne
@Laura W 8:14 pm
Laura, if you can @lease make sure to remind them to click and vote again tomorrow, and again Friday, and agin Saturday. I know we all needed daily reminders at first.
I’m getting excited about Bitsy’s chances, and I love how so many people, including old crusty types, are just moved by Bitsy’s story and the rescue cause.
Sly
The industry argument is that they need the exemption for loss sharing, standardized forms, and joint underwriting.
What the industry doesn’t say is that exemptions can be narrowly tailored to suit those purposes (as has been recommended repeatedly by the DoJ of various administrations and the ABA). Specific exemptions for form standardization, data sharing, and joint underwriting can exist without a blanket anti-trust exemption. It’s called “safe harbors” in regulatory parlance.
They don’t say this because the blanket exemption precludes the anti-trust division of the DoJ from doing anything more than analyzing market concentration data and issuing a recommendation to a state insurance commissioner in cases of mergers/acquisitions. You will never get approval from an anti-trust lawyer in a merger case where the resulting conglomerate will have over a 50% market share. And state regulators don’t have the manpower (and in some states, the authority) to go after such companies when they emerge.
Reason60
I mark this down to the terrible job the Obama Admin did in presenting the health care reform to the public.
They allowed the opposition to define what reform mean; only in the late innings did they even state clearly what the “public option” is; long after Sarah Palin defined it as a death panel dedicated to weeding out the sick and old.
In retrospect, there should have been congressional hearings into the abuses by insurance companies- all the horror stories we are just now hearing about; there should have been hearings into why there is no competition in the insurance “market”.
I consider myself well-informed, and yet I only became aware of this item in recent weeks.
Had they plowed the ground beforehand, they could have held the upper hand even in the town halls.
chrome agnomen
every once in a while someone will, either inadvertently, or drunkenly, blurt out, ‘the emperor has no clothes!’ these instances are, lamentably, few and far between.
Peter J
If the health insurance companies wouldn’t be able to engage in price-fixing, then all the smart people would leave the industry for wall street jobs with gigantic bonuses and help from the government when you go belly up.
And without all the smart people running these insurance companies a lot of ordinary people would die.
It’s a lot like the tax rate. If the tax rate gets to high then all the smart and rich people will either go Galt or travel to another country.
So that’s why price-fixing should be allowed and tax rates should be low.
tc125231
@Peter J: Droll. Good deadpan.
Martin
Well, the other half of the argument is that the balkanized set of state laws creates artificial market barriers that become prohibitively expensive to breach once markets have become mature.
Consider a BC/BS in, for instance, Arkansas. They may have 75% marketshare in that state. For BC/BS of Tennessee to enter that market, they need to toss the actuaries and underwriters at all of their Tennessee policies and rework them for Arkansas laws, negotiate deals with the major hospitals, physician groups, pharmacies, and then try to compete against an agency that already has all of that dialed in, and may well have a strong reputation in the state, not to mention probably owns the Insurance Commissioner.
The for-profit insurers already have all 50 states covered, so they’re all in pretty decent shape here. It’s the regional guys that will get screwed. And the problem isn’t just the exclusion but also the 50 different (radically, in some cases) set of different laws that insurers need to cover.
Eliminate this system, without just targeting the insurers, and a number of them will come on board.
drillfork
@Napoleon:
I’ve always thought that insurance companies assessing risk (e.g., teen drivers get in more accidents) amounts to profiling. Seriously, just because something may be true of a group, it doesn’t necessarily apply to any one individual.
And are there any “little” insurance companies nowadays?
Not being snarky. Just wondering…
Napoleon
It occurred to me after my last post in this thread that if there is a blanket repeal so that the companies can not share actuarial data, and the “public option” that gets passed are co-ops or state by state plans those plans (IMO) are automatically still born since what will happen is they will be denied access to actuarial information in order to accurately price coverage.
@Ohio Mom:
I thought they do not share detailed claims history (if for no other reason they use conflicting record systems, one of the whole arguments for going to a single payer system) but actuarial data.
@Sly:
Your point is important and correct.
@drillfork:
I am not sure I get your point but the whole basis for insurance is to profile your potential insured with whatever criteria is relevant and price accordingly (or don’t price at all if the risk is too unpredictable). Sure it may not be true of an individual, but get 1000 such individuals together and you can make predictions of what will happen to a certain number of them.
Sly
Slightly O/T, but safe harbors is generally considered the best way to go, in general, in dealing with regulatory mechanisms by consumer, labor, and environmental protection advocates.
The argument revolves around the notion of “regulatory innovation,” where companies will try to gain competitive advantages by circumventing regulations as they emerge. Traditional regulatory practice is almost always reactionary; government gets wind of some unfair or unethical practice, holds hearings, debates the issue, drafts a bill establishing a new law and mechanism to enforce it, and huzzah! Victory is ours!
The problem is that somewhere in that process the industry that the government is trying to regulate has already moved on from that practice to something else. Then the process has to repeat itself. This is how you get people like Schumer going after credit card companies for things like universal cross default when they’ve already moved on to something called “Any Time, Any Reason Term Change”. So instead of just jacking up your rate when you’re late on a Cable TV payment, the credit card company will just jack up your rate for any reason they want.
In other words, the traditional regulatory approach says to an industry “Practices A, B, C, and D are illegal.” Then the industry just does E, F, G, and H, which can have the same purpose and result as the illegal practices, but the regulators have to play catch up. Given the legislative process this can actually take a few years, so they never actually catch up.
Safe Harbors says to the industry “Practices A, B, C, and D are legal, but nothing else is. If you want to do other things, we’d have to make them legal first.” It forces the industry lobbyists to chase the regulator instead of the other way around.
This is how nearly every other country does for-profit insurance regulation. There’s only a certain amount you can charge, you have to give these benefits, you have to use this kind of language in your policies, etc.
Napoleon
@Sly:
And insurance (or any well matured segment of the economy) lends itself particularly well to that type of regulation.
sparky
@Napoleon: as an uninformed spectator, i concur with your observation about the public option. much better to pass something that you know is going to fail.
the people who are in this for the long haul are the people who are writing the bills–the lobbyists and lawyers. what we see on the surface is fluff for public consumption. perhaps there will be a fake “cave” by the insurers for a “public option” that is neither.
for the uninvited masses, public action these days has about as much clarity as the selection of a new Pope. this is somewhat obscured by the 30% of the population that thinks it is still sitting around a campfire with John Wayne.
Crust
Note the two are consistent. Yes, it should be done, but lots of things aren’t being done that should be done. That’s politics (and powerful interests) for you. Obama and the insurance companies were making nice. They still are kinda-sorta (see public option jockeying or compare to the Clinton era), but the insurance companies broke the deal and the Dems are retaliating by doing this. Which is a good thing.
ksmiami
I still think we can’t fix healthcare without fixing the current American dietary problems stemming from corn syrup subsidies, powerful fast food companies, soda junk sellers etc. My admittedly small idea is giving each American a special card that awards points for better dietary choices; it can be used at any grocery store or even farmers markets and then the amount of points can be traded in for cash and prize awards, discounted insurance and more. It wouldn’t penalize anyone for buying oreos, but it could incentivize people to adding some fresh fruit and cheerios.
Hugh
I just submitted this basic question to Ezra Klein’s live Thursday chat. I hope he picks up on it.
cia
From Andrew Sullivan’s Blog:
From The Dept. Of Careful What You Wish For
Some Democrats want to repeal the insurance anti-trust exemption. Austin Frakt and Ian Crosby caution:
[I]nsurance companies are partially exempt from federal antitrust law for an important reason: so they can share rate-making data. This function actually benefits small insurers who would not otherwise have sufficient data to properly adjust premiums. Paradoxically, removing the legal cover for data sharing would harm small insurers more than large ones.
http://andrewsullivan.theatlantic.com/the_daily_dish/2009/10/careful-what-you-wish-for.html