How Insurance Works

Stopping Health Insurance Price Fixing


in my play book tonight Congress is hitting back
against health insurance industries no question about it and also they’re trying to block health
care reform so the fight is on this morning the house judiciary committee
voted to strip insurance companies of an exemption from anti-trust laws that they have enjoyed
since the nineteen forty’s meanwhile senators Leahy, Schumer, and Reed announced their intention
to add a similar measure over on the Senate side to the Senate health bills joining me now is a Democratic Congresswoman
Diana DeGette of colorado co-sponsor of the anti-trust legislation that passed the House Judiciary Committee today, Congresswoman good work it’s about time it seems like kind of a no-brainer
doesn’t it well it really does, do you think that
this is going to be able to reel in the industry when it comes to price fixing
and also allocation of competition in states what do you think? well the bill passed by the Judiciary
Committee does just that it says that now the Justice department can look at whether
there is price fixing and and other kinds of anti-competitive behavior
going on right now under current law they can’t do
that well I don’t mean the fly in the ointment on this
but in the insurance industry for on insurance a company to go from one
state to another state they got a deal with state laws they got to
deal with the application process they got to deal with the financial requirements and there’s always state politics do you really think that this anti-trust exemption
is going to change competition across state lines well here’s the situation the reason that insurance companies
were made exempt from the federal anti-trust laws is because they are mostly regulated
in the states but as we’re looking at putting together a national
health care legislation we don’t want insurance companies to engage
in anti-competitive behavior one of the reasons health insurance
is so costly right now is that in most of the country they’re in a monopolistic
situation in Pueblo, Colorado in my state for example one insurance company controls over seventy
percent of the market so we’re helping our legislation will at least go part of the
way towards encouraging competition so that people don’t have these monopolistic
situations
well the American medical association came out with a study nationally
this is what it looks like ninety four percent of the top metropolitan insurance markets are anti competitive also Alabama and North Dakota in those two
states ninety percent of the market is controlled by a single insurer now those are not very well
populated states do you actually think the insurance companies are going to go in
the markets if they don’t have the number of customers to make a profit well I think in the exchange people
will have enough customers to make a profit and and who knows what’ll happen I mean if there’s
if there’s nobody that wants to compete then you won’t
you won’t be forcing people to go in there but why should we exempt them from the antitrust
laws? why should we let them get together and say okay you can take this market and you take
that other market and oh by the way we’re going to set
our prices a certain way we don’t want that type of thing to happen Congresswoman, good to have you with us tonight
I appreciate your time


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