NU Online News Service, Jan.7, 3:40 p.m.EST

WASHINGTON–House Democrats are insisting that finalhealth care delivery reform legislation include a provisionrepealing the antitrust exemption afforded to healthcare andmedical liability insurers.

In the draft of a letter that supporters of such a provisionplan to circulate to all House Democrats, the members said that inthe absence of a "public option" repealing the antitrust exemptionis one obvious cost-cutting incentive tool.

The letter is being written to House Speaker Nancy Pelosi,D-Calif. and circulated to the offices of all House Democrats byRep. Peter DeFazio, D-Oregon, and Rep. Gene Taylor, D-Miss.

It urges the House leadership to insist that the House languageto repeal the health insurance and medical liability insuranceexemption from federal antitrust laws be in the final bill.

Such a provision is included in the House version of the healthcare bill. A similar provision was deleted from the Senate versionin order to get the vote of Sen. Ben Nelson, D-Neb., a former stateinsurance commissioner and the critical 60th vote for theDemocrats.

The issue was also raised in comments by House Democraticleaders in a meeting yesterday with President Obama and otheradministration officials at the White House.

Rep. Louise Slaughter, D-N.Y., who calls the exemption,"terrible," and asks "Why should they be exempted?" raised thematter during the White House meeting.

She added that "The exemption should
have been lifted 30 years ago, or should never have been put on inthe first place."

Similar comments were voiced earlier by Rep. Chris Van Hollen,D-Md., who is an assistant to Speaker Pelosi.

He said it would be an important concession sought from theSenate as reconciliation of the health care bill continues,"especially if you were not to have a public option, that wouldbe
important," Van Hollen said.

"The whole purpose of getting rid of the
exemption would be to make sure you police competition so youcannot collude," he said.

The letter also insists that as part of any compromise they wantto see a provision in their antitrust language giving the FederalTrade Commission the authority to collaborate with the U.S.Department of Justice in investigating the insurance industry bypermitting the FTC to investigate health insurers and medicalmalpractice insurers.

The final language in the House bill dealing with the FTC is acompromise. Earlier versions gave the FTC the authority toinvestigate and create reports on all components of the insuranceindustry.

"One tool that stands out for attracting strong bipartisansupport is removing the current antitrust exemptions enjoyed by thehealth insurance industry," the letter says.

It notes that an October Rasmussen poll found that 65 percent ofAmericans favored removing the anti-trust exemption for healthinsurance companies. Democrats supported subjecting insurancecompanies to antitrust laws by a seven-to-one margin, the letteradded.

It also said that 64 percent of independent voters and 58percent of Republicans also believe insurers should abide byantitrust laws. "Asking health insurance companies to play by thesame rules as every other company in America gets significantsupport across party lines," the letter said.

The letter added that since the McCarran Ferguson Act providingthe exemption was passed in 1954, "regulation of the insuranceindustry has since been left largely to the states, which sufferfrom a lack of resources to go after offenders, as well as apatchwork of 50 different state regulatory regimes withinconsistent enforcement."

Joel Kopperud, a director of government relations at the Councilof Insurance Agents and Brokers, reacted to the letter by saying,"We're very concerned that members of congress continue to viewmedical liability as a health product, when in fact it's a propertyand casualty product, and the implications of removing theanti-trust exemption established in McCarran-Ferguson would besignificant to the entire industry."

"We have a very small window here to educate lawmakers on this,and we're working closely with everyone we can to do just that," headded.

Marliss McManus, a senior federal affairs director for theNational Association of Mutual Insurance Companies, said, "today,as in 2007, proponents of a repeal demonstrate a lack ofunderstanding about McCarran and the nature of insurance."

She explained that the limited antitrust exemption wasestablished in the McCarran-Ferguson Act to provide greater accessto data for insurance companies so that they could more accuratelydetermine the risks involved and set their prices accordingly.