Reps. DeFazio, Ferguson, Nadler, Cicilline, Buck send bipartisan letter to Justice Department requesting information on federal antitrust enforcement in health insurance industry

WASHINGTON, July 28 — Rep. Pierre DeFazioD-Oregonissued the following press release and letter on July 27, 2022:

Yesterday, Reps. Pierre DeFazio (OR-04), Drew Ferguson (GA-03), Jerrold Nadler (NY-10), Ken Buck (CO-04) and David Cicilline (RI-01) sent a letter to the US Department of Justice (DOJ) requesting information on how the Department exercises its expanded powers to clamp down on anti-competitive practices within the health insurance industry. DeFazio’s bipartisan Competitive Health Insurance Reform Act (CHIRA), which was signed into law in January 2021closed an outdated special interest loophole, allowing the DOJ to enforce federal antitrust law in the health insurance industry.

“Repealing the archaic antitrust exemption for the health insurance industry was a monumental legislative achievement, but we must ensure that justice department and the Federal Trade Commission use their expanded powers to clamp down on any anti-competitive practice in this wealthy industry,” said DeFazio Representative. “Even before the COVID-19 pandemic, nearly one in four Americans — including insured Americans — were skipping medical care and prescription drug doses due to high costs. Today, while medical care affordable prices are more important than ever, health insurance companies continue to drive up prices to consumers and reap huge profits on the backs of the elderly, working families and ordinary Americans.The Department must control the industry, and CHIRA is an essential tool to do so.

In the letter, the members state, “By repealing the antitrust exemption of the McCarran-Ferguson Act, the Competitive Health Insurance Reform Act removes a major impediment to the scope of the Department’s enforcement power over the insurance industry. disease and further empowers the Department to address anti-competitive practices. practices that have undermined competition and harmed consumers for decades. justice department noted in support of the enactment of the law, the removal of this exemption “will strengthen the Antitrust Division ability to investigate and prosecute anti-competitive behavior.”

Rep. DeFazio’s Adoption of the law on the reform of competitive health insurance Congress unanimously and was promulgated in January 2021. The letter sent yesterday to justice department aims to ensure the proper application of the law and requires that the justice department inform Congress should it need additional resources to enforce federal antitrust laws.

The McCarran-Ferguson Act, passed in 1945, previously exempted the health insurance business from federal antitrust laws that protect and promote fair competition. CHIRA repealed this outdated exemption for the health insurance sector and gave the justice department and the Federal Trade Commission the power to enforce federal antitrust laws against anticompetitive behavior by health insurance companies.

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To: The Honorable Jonathan Canterdeputy attorney general, Antitrust Division, US Department of Justice, 950 Pennsylvania Ave. NW, washington d.c. 20530

Dear Deputy Attorney General Kanter:

We write about the antitrust authority of the justice department (DOJ) in health insurance markets following the enactment of the bipartisan Competitive Health Insurance Reform Act of 2020.

The enactment of this law amending the McCarran-Ferguson Act was a monumental and positive step for competition and consumer protection. And the amendment was much needed: In the decades since the McCarran-Ferguson Act was enacted in 1945, health insurance brokers became increasingly consolidated, leaving the industry ripe for abuse. With few exceptions, the McCarran-Ferguson Act gave health insurance companies carte blanche to exercise market power and collude to drive up premiums, inflate consumer prices, restrict competition, and deprive consumers of choice./1

Despite the clearly anti-competitive nature of these practices, federal enforcement has been limited in this area due to the McCarran-Ferguson Act’s outdated antitrust exemption and the courts’ overly broad interpretation of that exemption. For example, as the Department is aware, as recently as December 2020, a United States District Court dismissed antitrust complaints against the Blue Cross Blue Shield Association for allegedly conspiring with its members to deny patients and providers insurance coverage for telemetry monitors, believing the Association to be immune from suit./2

By repealing the McCarran-Ferguson Act’s antitrust exemption, the Competitive Health Insurance Reform Act removes a major impediment to the extent of the Department’s enforcement power over the health insurance industry and further empowers the Department to combat anti-competitive practices that have undermined competition and harmed consumers for decades. As the justice department noted in support of the enactment of the law, the removal of this exemption “will strengthen the Antitrust Division ability to investigate and prosecute anti-competitive behavior.”/3

The importance of this law became clear less than a month after its promulgation. In February 2021the American Hospital Association (AHA) asked the DOJ and FTC to use their new power to investigate anti-competitive pricing by nurse recruitment agencies and the conduct of several large commercial health insurance companies,4 including UnitedHealth – a request the DOJ may have encountered difficulty in acting despite evidence-based accusations. Behavior such as that alleged by the AHA harms patients and healthcare workers and undermines the WE health care system.

For Congress In order to better understand how the Department enforces antitrust laws in this area following the enactment of the Competitive Health Insurance Reform Act, we respectfully request responses to the following questions by August 30, 2022:

1. Since January 13, 2021which shares, if any, have the Antitrust Division taken to enforce antitrust laws against health insurance companies that are no longer exempt from the application of the McCarran-Ferguson Act?

2. In addition to the case highlighted in this letter, the Antitrust Division submitted amicus briefs, opinions of additional authority, business advisory opinions, or other material regarding the legal consequences of the Competitive Health Insurance Reform Act in private litigation?

3. Given the expanded powers following the promulgation of CHIRA, what measures will the Antitrust Division taken to review existing health care guidelines to determine if improvements or new guidelines are needed?

4. Are there other laws or case law that prevent or frustrate the efforts of DOJ enforce antitrust laws in health insurance markets?

5. Would an increase in resources help Antitrust Division enforce federal antitrust laws in the health insurance industry?

Thank you for your attention to this important subject.

See footnotes here: https://defazio.house.gov/sites/defazio.house.gov/files/DeFazio%20Ltr%20to%20DOJ%20and%20FTC%20re%20CHIRA%20Implementation%20and%20Health%20Insurance%20Antitrust%20Enforcement.pdf

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Original text here: https://defazio.house.gov/media-center/press-releases/for-immediate-release-defazio-ferguson-nadler-cicilline-buck-send

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