Tearing Down the Barriers to Competition
Congress is on the brink of passing legislation that will truly reform the health insurance market. Reform will improve competition and rein in rising costs, while providing millions of uninsured Americans with access to high quality health care. Competition is the crux of the debate - the lack of competition in the market has hurt consumers, and has contributed to rapidly escalating health care costs. Every year, health care premiums consume a larger portion of Americans household budgets. By tearing down the barriers to competition, for example, by repealing an antitrust exemption and creating a strong public insurance option, Congress can achieve the goals of lower costs and improved health care outcomes.
As premiums continue to skyrocket, we must ensure that health insurers are not engaging in anticompetitive behavior and unfairly driving up health care costs. Since 1945, the health insurance industry has enjoyed an exemption from federal antitrust law. This exemption prevents the application of federal antitrust laws to the business of insurance, provided that the activity is regulated by state law and is not designed to boycott, coerce, or intimidate. Despite the fact that the health insurance industry is highly concentrated, the federal government is handcuffed in its ability to identify or respond to any potential violations. The American Medical Association estimates that 94 percent of the top insurance markets are anticompetitive. In Pueblo, Colorado, for instance, one insurance company controls over 75 percent of the market. Yet the Department of Justice currently does not have the authority to investigate the industry to determine if anticompetitive violations are occurring.
To protect consumers from such unfair practices, House Judiciary Chairman John Conyers (D-MI) and I introduced The Health Insurance Industry Antitrust Enforcement Act. This measure would repeal the insurance industry's immunity in instances of price fixing, bid rigging, and market allocation by health or medical malpractice insurance issuers. These potentially egregious violations should not be permitted to occur in any industry, and the federal government should be given the power to protect the public from harmful behavior that drives up prices. President Obama recently voiced support for our efforts, criticizing health insurance companies for "earning [large] profits and bonuses while enjoying a privileged exemption from our antitrust laws, a matter that Congress is rightfully reviewing." In conjunction with House leadership, we expect to fold our provision into the broader health care proposal currently moving through the House.
Congress is also debating the benefits of creating a public insurance option, which would provide much needed competition in the market. Both the House and Senate are poised to approve bills that will include a public option. A recent Wall Street Journal/NBC News poll found that 72 percent of Americans think it is "extremely or quite important to give Americans the choice" of health care plans, while a Washington Post/ABC News poll shows that a majority of Americans - by a margin of 57 percent to 40 percent - support a public option.
Offered within a health insurance exchange, a public option would compete on a level playing field against private insurance companies in order to reduce costs. It would not come close to replacing private industry; rather it would simply provide Americans with another choice that will likely be more innovative and affordable than the options currently available. A public option is essential to creating the cost-savings necessary to offset the cost of providing all Americans access to affordable health care.
Reforming our health care system begins with tearing down the barriers to competition in the health insurance market. Without competition, as in the form of antitrust reform and a public option, our health care costs will continue to rise at rates that are unsustainable. U.S. premiums have risen already by the dramatic rate of 87 percent over the last six years. This is simply untenable. We must begin removing barriers to competition by moving forward with market reforms that will improve competition and hold down costs.
U.S. Rep. Diana DeGette, serving her 7th term as the Representative of First Congressional District of Colorado, is the Vice Chair of the Committee on Energy and Commerce.
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Regulate health insurance?! ABSOLUTELY !! I may be the only living person (49) who remembers how car insurance was prior to regulation. It was so unfair and discriminatory. Yet it seems to me the auto insurance industry has done well. They said it would kill them, it didn't. Same is true for health care. Treat health insurance just like car insurance and we'd have a better system.
The govGive me a break, it's the gov't that is practicing anti-competetive behavior in the insurance industry. Why can't any insurance company operate in Colorado? The answer is that the government prevents them. They allow a small number of insurers, the ones that pay politicians alot of money, to operate in colorado and keep everybody else out.
The public option is UNFAIR competition since it is funded with tax dollars.
How about some tort reform. Oh, I forgot, that butters the trial lawyer's bread.
Let's do this piecemeal, like the Repubicans want to do:
Could open up all the state markets to competitions, along with allows cross border insurance. That wouldn't make a splash with genius Washington lawmakers.
Of course, you need more insurance providers in order to compete, and in the U.S. we really only have 3. Revoke Anti-trust exemptions is obvious, or establish a government provider, and allow the market to establish fair rates. Thats the idea behind the public option.
1-Revoke anti-trust exemption
2-Establish alternative provider
3-Remove cross state restrictions
These would all be rational responses. And this is what Progressives want. BUT, is this in the bill????? I hate Washington.
It's a start. Here's a suggestion on the NEXT move: Health Care insurers can only offer health care benefits already on the books from the so-called competition.
This would be the best way to clear up all the problems associated with this racket and FAST.
Ooops. Sorry about calling it a "racket".
No I'm not.
Thank you Congressperson.
In order to have competition, we need government laws.
That has always worked - Agri and Pharma prevent any competition...because they are protected by government under the logic of "competition".
Give me a break.
Do you want to save this country? Get us out of GATT, NAFTA and the WTO. I won't hold my breath.
Unless and until you do something drastic about reforming our campaign finance system, every effort on behalf of the middle class will be sisyphean.
Campaign finance is the disease - everything else is merely a symptom.
As long as you're working on 'barriers to competition'.... let's open up medical schools to all who show aptitude and not just those with 'connections', increase the opportunities for foreign Dr.s to obtain licenses to practice here, and pressure hospitals that accept any public funds to stop limiting the numbers of dr.s in each field that are granted 'staff privilages'.
All you have to do is open the market up. It is the gov't that limits who can run an insurance company in each State and how many can run in each State. I love how the gov't restricts competition and then complains about it and comes up with a complicated answer to such a simple problem. Open up the market.
Yes open it up!
Thank you very much for working to make antitrust law apply to insurance companies.
I wish my rep was working for me like that.
STOP OUTSOURCING AND THE USE OF H 1-B VISAS!
AMERICA ...FIRST
NOT LAST!
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