Competitive Health Insurance Reform Act

Floor Speech

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Mr. DAINES. Mr. President, I rise today to speak about my bipartisan legislation, the Competitive Health Insurance Reform Act, which I introduced with my colleague Senator Patrick Leahy. This is important legislation that will protect consumers from anticompetitive practices by repealing the outdated antitrust exemption for the health insurance industry. This bill has wide bipartisan support, as well as a strong history of near-unanimous congressional consensus, having passed the House of Representatives three times, most recently this September.

In 1944, the Supreme Court ruled in United States v. South-Eastern Underwriters that the business of insurance was a form of interstate commerce. This meant that the health insurance industry would be subject to Federal antitrust laws under the Commerce Clause of the Constitution. The insurance industry began raising uncertainties about whether this meant that States would no longer have authority to regulate insurance. When Congress acted to reaffirm this State authority, in the McCarran-Ferguson Act, the insurance industry managed to add a last-minute special-interest loophole that exempted the business of insurance from Federal antitrust laws.

It has become clear that this antiquated exemption has effectively given insurance companies the power to collude to drive up prices, restrict competition, and deny consumers choice. The large health insurance companies of today have taken advantage of this exemption to abuse the market and artificially inflate healthcare costs. As a result, consumers are paying higher prices to get basic healthcare services, which couldn't be a worse outcome in the middle of a major pandemic.

I recognize concerns have been raised about whether this legislation might impair or create uncertainty regarding the authority of State insurance regulators. I appreciate hearing from all stakeholders and wish to put those concerns to rest by making clear the intent and scope of the bill. This legislation merely amends a peripheral provision of the McCarran-Ferguson Act containing an antiquated exemption from Federal antitrust laws as it applies to health insurance companies. It does not in any way interfere with, supersede, or abrogate the authority provided and guaranteed by the McCarran-Ferguson Act to State insurance regulators to regulate the health insurance industry.

This legislation would ensure that health insurance companies would be subject to Federal antitrust laws in the same way as the rest of the American economy, including other regulated sectors. Most importantly, as this bill does not disturb any of the authority provided to State insurance regulators under the McCarran-Ferguson Act, it does not empower Federal authorities to interfere with, supersede, or prevent states from regulating the health insurance industry however they see fit.

Simply put, this legislation would give the Department of Justice and the Federal Trade Commission authority to apply antitrust laws to anticompetitive practices in the health insurance industry. Furthermore, it is the intent of the authors of this legislation that the DOJ and FTC notify and work with states on investigations they have received or are undertaking that involve health insurance entities in their state.

The Competitive Health Insurance Reform Act will restore full transparency, promote oversight, and encourage competition within the health insurance industry. I look forward to this legislation being signed into law by the President.

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