Last week, the U.S. House of Representatives passed a bill that would end the limited Federal antitrust immunity for health insurers.  The Competitive Health Insurance Reform Act of 2017 (H.R. 372) passed the House 416-7 and is currently pending before the Senate Committee on the Judiciary.  H.R. 372 amends the McCarran-Ferguson Act of 1945, which exempts health insurers from the Federal antitrust laws in certain circumstances.

Specifically, the McCarran-Ferguson Act affords insurance companies such an exemption under two conditions: (1) the challenged practice must be part of the  “business of insurance”; and (2) the practice must be regulated by State law (including State antitrust laws).  Notably, there is an exception to this exemption for acts or agreements of boycott, coercion, or intimidation.  If H.R. 372 is signed into law, health insurers would be subject to all Federal antitrust laws.  According to the Congressional Budget Office (CBO), implementing H.R. 372 would cost the Federal government less than $500,000.  The CBO also determined that H.R. 372 would not have a significant effect on the premiums private insurers would charge for health or dental insurance.  The full text of H.R. 372 is available here.  The CBO’s report is available here.

H.R. 372 was supported by both Republicans and Democrats, as well as the American Hospital Association (AHA).  In a letter submitted to H.R. 372’s sponsor, the AHA applauded the repeal of the exemption from anticompetitive conduct for health insurers.  According to the AHA, exemptions should be “carefully tailored to achieve a pro-competitive purpose.”  The AHA had previously expressed its concern with the abuse of market power by large commercial insurers.  Because H.R. 372 is expected to increase competition in the health insurance marketplace if signed into law, the AHA supported the bill.  The White House has endorsed H.R. 372 and indicated that President Trump would likely sign it into law if presented in its current form. 

The introduction of H.R. 372 comes after two controversial health insurance mergers between (1) Anthem, Inc. and Cigna Corp. and (2) Aetna Inc. and Humana Inc. were successfully blocked by the Department of Justice.  These decisions were both recently upheld in the United States District Court for the District of Columbia.  Anthem appealed to United States Court of Appeals for the District of Columbia, which heard oral argument in the case last Friday.