A funny thing happened on the way to the “ObamaCare Train Wreck”: the error rate on the hapless website fell below 1%, nobody died for lack of affordable health insurance on the exchanges (in contrast to the real “Katrina”), and both Democrats and Republicans found something they agree on: the 1945 McCarran-Ferguson Act should be “reformed”. That Act partially exempted all forms of insurance from federal anti-trust laws -- initially, to foster competition by permitting start-up insurers to obtain actuarial data from more established ones. Today, it allows health insurers – regulated exclusively by state insurance authorities -- to engage in anti-competitive practices while remaining immune from the consumer protection jurisdiction of the Federal Trade Commission (“FTC”). Enter Congress. While Democrats consistently call for repeal of that exemption, H.R. 3121 – the bogus “Republican Alternative” to what was originally their own Affordable Care Act (“ACA”) – would restore the FTC’s jurisdiction over “unfair trade practices” (only), while reaffirming exclusive state jurisdiction over “insurance sales, solicitations, or cross marketing activities”. This limited “reform” is especially dubious given health insurers’ well-documented “bait and switch” tactics regarding policies “grandfathered” by the ACA. Meanwhile, some on Wall Street are advising increased investment in healthcare stocks -- because the ACA will not be abandoned, millions of new customers will be purchasing competitive health insurance policies, “healthcare” encompasses much more than just health insurance companies, and that industry’s profits will benefit from accelerating consolidations to achieve administrative cost savings. However, with those consolidations will also come increased industry pressure for direct interstate marketing of health insurance policies. H.R. 3121 would also authorize that largely unprecedented restructuring of the entire health insurance industry and instigate insurer migration to states with the weakest regulations – clearly making health insurance subject to the Commerce Clause without restoring the FTC’s authority to regulate it. Bill Hugenberg
Posted on: Tue, 19 Nov 2013 23:10:11 +0000