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Public Statements

Protecting Access to Healthcare Act

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. SMITH of Texas. Madam Chair, 2 years ago, during the debate over the Obama administration's unconstitutional health care bill, this House considered a measure similar to this amendment.

During that debate, I argued that the repeal of the McCarran-Ferguson antitrust exemption for health insurers had ``all the substance of a soup made by boiling the shadow of a chicken.'' However, I reluctantly supported that bill because I believed that it would have no meaningful effect. Compared to the administration's health care bill, a bill that does nothing looked like a great idea.

As I noted during the debate 2 years ago, the repeal of the McCarran-Ferguson exemption for health insurers will not bring down premiums.

The Congressional Budget Office (CBO) says that ``whether premiums would increase or decrease as a result of this legislation is difficult to determine, but in either case the magnitude of the effect is likely to be quite small.''

The effects of the repeal of this exemption will be small. The CBO says, ``State laws already bar the activities that would be prohibited under Federal law if this bill was enacted.'' Every State's insurance regulations ban anticompetitive activities like bid rigging, price fixing and market allocation. Every State has insurance regulators who already actively enforce these prohibitions.

This amendment, like the bill we considered 2 years ago, will have no meaningful impact and may have minor negative unintended consequences.

But I will once again reluctantly support this measure because this amendment takes important steps to limit its unintended consequences and to reaffirm the McCarran-Ferguson exemption for non-health lines of insurance.

This amendment contains language that clearly limits its application to the business of health insurance. While the repeal of the McCarran-Ferguson exemption for health insurance does essentially nothing, repealing it for other types of insurance could be disastrous.

One of the main benefits of the McCarran-Ferguson exemption is that it allows insurance companies, subject to state regulation, to share historical and actuarial data.

The antitrust laws generally frown on competitors that share data. But in the insurance market, sharing data improves competition. This is because a shared pool of data about the risks and loss rates of various kinds of insurance allows small and medium-sized insurers to enter the market and compete.

If insurance companies did not pool data, only the largest insurers would have access to enough data to account for risk and price their policies.

For a number of reasons, which include the size of most health plans, the availability of health care data from various public and private sources, and the relative predictability of health care costs, health insurers rely much less on sharing data than other insurers.

This amendment contains a clear definition that limits its application to the business of health insurance. It clarifies that the McCarran-Ferguson exemption continues to apply to life insurance, annuities, property and casualty insurance, and other non-health types of insurance. It is an improvement over other proposals that are not so limited, defined and clear about their intent.

This amendment also prevents private class action antitrust lawsuits against health insurers. This limits the possible unintended negative effects.

Because this amendment is much improved in ways that will limit its unintended consequences, and because it reaffirms the importance of the McCarran-Ferguson exemption to non-health lines of insurance, I support the amendment.

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