In late March, legislation that would repeal the health insurance industry's antitrust exemption, contained in the McCarran-Ferguson Act (15 USC §§1011 et seq.), was passed by the House of Representatives as an amendment to H.R. 5, the "Protecting Access to Health Care Act." The text of the McCarran repeal provisions (Title IV of H.R. 5) mirror those introduced last year by Representative Paul Gosar of Arizona as a stand-alone bill McCarran repeal bill (H.R. 1150). That legislation, however, had made little progress since its introduction. Accordingly, Representative Gosar, recognizing that HR 5, a Republican-sponsored bill that would abolish the Independent Payment Advisory Board (an entity created by the Affordable Care Act to advise on Medicare rates) and cap punitive damages in medical malpractice cases, was moving swiftly towards a vote in the House, introduced his bill as an amendment to H.R. 5. His strategy proved successful when the House subsequently passed H.R. 5 – with Representative Gosar's amendment included in the bill.
Tracking Representative Gosar's prior legislation, Title IV of H.R. 5 provides that, notwithstanding the McCarran-Ferguson Act's antitrust exemption, "Nothing contained in [the Act] shall modify, impair or supersede the operation of any of the antitrust laws with respect to the business of health insurance." As such, the exemption would continue to apply to life insurance and property & casualty insurance, as the legislation itself expressly provides. In addition, as had been the case with H.R. 1150 as well, the legislation provides that Section 5 of the FTC Act (which prohibits "unfair methods of competition") shall apply to health insurers even if they are nonprofit entities and, in a provision likely to provide some (small) comfort to insurers, limits antitrust actions against them to individual actions, barring private class action proceedings.
In introducing his amendment, Representative Gosar exhibited the same anti-McCarran fervor that he had exhibited when introducing H.R. 1150 last year. After again noting – as he had last year - that the House had passed similar legislation by a wide majority last Congress (as part of the House's original Affordable Care Act legislation), Representative Gosar, a dentist for over twenty five years, urged the House to repeal what he claimed was an "outdated, nonsensical exemption." Whether persuaded by Representative Gosar's views on McCarran or not, voting on H.R. largely followed party lines, passing by a vote of 223 to 181.
Whether Representative Gosar's success in the House will be replicated in the Senate, however, is far from clear. While Senator Leahy of Vermont has repeatedly advocated that McCarran should be repealed, and announced last year that the repeal of McCarran would be a "priority" of his this Congress, neither he, nor his fellow Democrats, is likely to embrace H.R. 5, with its anti-Affordable Care Act provisions and medical malpractice caps, and with the Democrats in the majority in the Senate, that may ensure that the legislation goes no further. Nevertheless, the Obama Administration, taking no chances, promptly issued a "Statement of Administration Policy" in which it criticized H.R. 5 for "attempting to erode the important provisions of the Affordable Care Act" and imposing caps on medical malpractice awards that would "prevent patients and other claimants who have been wrongfully harmed from receiving just compensation." Moreover, removing any doubt about the Administration's view of the issue, the Statement concluded by indicating that "If the President is presented with H.R. 5, his senior advisors would recommend that he veto the bill."
Accordingly, despite the House's passage of the bill, the likelihood that McCarran repeal legislation will be enacted into law this Congress remains tenuous, at best, particularly absent some creative legislative maneuvering by McCarran-repeal advocates. Stay tuned.
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