Health Insurance Articles
Democrats Not Supporting Insurance Trust Exemption
2009-10-21
Congressional Democrats have called for the removal of the insurance trust exemption to be added to the healthcare reform bill. The exemption from antitrust laws has been part of the law since 1945, when it passed as the McCarran-Ferguson act. The act ceded federal regulatory control of the health insurance industry to the state level, and many prominent Democrats feel that the exemption should now be removed. The McCarran-Ferguson act and its implications on health insurance regulation are being approached in both the Senate and the House of Representatives, which are each controlled by a Democratic majority.
Among the major players of the democratic parties that have called for the trust exemption to be removed is Chuck Schumer (D-NY). "It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable," said Schumer of the insurance trust exemption. "It is time to end this special status and bring true competition to the health insurance industry." Ending the McCarran-Ferguson exemption would certainly create a round of problems for the health insurance industry. It would put the industry under the same federal anti-trust control that other industries face, which Democratic supports claim is a fair and necessary change from the current system. Removing the trust exemption, they claim, would ultimately benefit health insurance consumers, who would see lower premiums stemming from more competition as the healthcare industry was regulated.
However, there has been a backlash to the move from health insurance companies, who released statements decrying the removal of the exemption. They claim that state and federal regulation of insurance companies has been massive, despite the insurance trust exemption. The health insurance industry has vehemently opposed possible reform legislation, and released a report on the weekend of October 10 that claimed premiums would increase massively as a result of the healthcare reform bill (if it passes). Many health insurance industry experts claim that the move by Schumer and other Democrats is politically motivated. Democrats in both the House of Congress and the Senate claim that removing the health insurance trust exemption is a move that should have happened many years ago.
"The health insurance's antitrust exemption is one of the worst accidents of American history." Schumer said. Harry Reid (D-NV) echoed his sentiments, stating that "[Removing the insurance trust exemption is] something that should have been done a long time ago." Whether or not the McCarran-Ferguson exemption is ultimately and permanently removed from law in the current round of healthcare reform, the move to do so indicates that Democrats will oppose health insurance interference in the healthcare proceedings.
