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Insurance companies are free to Antitrust Laws - Why?

Senator Chuck Schumer (D, NY) and Patrick Leahey (D, Vermont) seems to be gaining ground to remove in their efforts to change insurance companies from the protection of competition happen.

The ongoing review of health care was currently being discussed in the foreground gave the privilege of the insurance industry has enjoyed in the last 64 years: insurance, like Major League Baseball, were exempt from the Federal antitrust laws.

Monopolies Commission stagnant markets by preventing the exercise of any other healthy competition in the market. If the exemption a dying Dinosaurs?

Brief history of anti-trust laws

to obtain given the fears of monopolies in the late 1800s and America's economy adopted the free market, the Congress of the Sherman Antitrust Act in 1890, which aims to reduce anti-competitive practices, market dominance of individual to preserve free enterprise and competition, as the rule of trade.

Soon, the courts found certain activities fall outside the scope of the Sherman Anti-Trust Act. To plug that gap Act Congress passed the Clayton Anti-Trust of 1914. The Clayton Act, the following practices in the list of prohibited activities: Price discrimination between different purchasers if such discrimination tends to create a monopoly, exclusive, tying arrangements, and mergers and acquisitions in a significant reduction of competition in the market.

The Robinson-Patman Act of 1936 amended the Clayton Act. The change was aimed from the fact that certain abuses in outlaw manufacturer practices.

Brief history of the insurance exemption

fell before the 1940s, the Insurance in the sole competence of the Member States. A Supreme Court case by the name of United States v. South-Eastern Europe Underwriters challenged partly for reasons of competition law. The Supreme Court held that the federal government regulate insurance companies could be under the supervision of the Commerce Clause in the U.S. Constitution.

The McCarran-Ferguson Act of 1944 provides that federal anti-trust laws will not apply to the "business of insurance" as long as the state regulates in this area, but federal anti-trust laws in cases of boycott to apply coercion, and intimidation.

The intent of the McCarran-Ferguson Act was the return of the legal climate that existed before the continued south-east by the Underwriters, an indication that the states retained the authority to regulate and tax the insurance business.

According to Senator Patrick Leahey, Judiciary Committee chairman, the antitrust exemption of the 1944 McCarran-Ferguson Act was should be only temporary. Senator Trent Lott and others have argued that the exemption was to collusion by insurance companies on the fixing of rates and Allegations denied, as the experience of the witness led Hurricane Katrina. McCarran-Ferguson, in other words, is outdated and potentially harmful.

Department of Justice Position

Christine A. Varney, Assistant Attorney General (Antitrust Division), told the U.S. Senate Judiciary Committee hearing on "Prohibition of price fixing and other anti-competitive behavior in the Health Insurance Industry. "The following points can be taken from their statement:

Ms. Varney argues

"Health care reform should be built on a strong commitment to competition in all health care markets, including those for health and medical malpractice insurance. Repeal of the McCarran-Ferguson Act would allow the competition a greater role in the reform of Health and medical malpractice insurance markets than would otherwise be the case.

"The House health care reform is considering changing quasi-national exchange, The Senate Finance Bill is considering national health insurance and all bills to be considered interstate compact by which the insurer on a single product on an array would sell for States. These steps are all likely to increase competition and it is less likely that antitrust enforcement is necessary, but they make the presence of an exemption even more dangerous. "

Completion

If the top lawyer of the Justice Department identified the Exemption as "dangerous" to the functioning of the quasi-national stock exchanges [This is the public option,] actually, the time might just be ripe for Congress to remove the exemption.

On the other hand, by spending countless millions of dollars lobbying Congress could the insurance industry still have the upper hand in influencing the health care reform. Why should they lose that monopoly? In some states, one or two insurance companies control all the insurance business. Is this a "free market economy?"

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Senate Session 2010-03-25 (20:45:03-21:34:04)