House Health Bill Boosts FTC Authority Over Health Insurers

By David Espo | November 2, 2009

Health care legislation headed for a vote in the House would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative, Democratic officials said.

The FTC, which investigates alleged anticompetitive practices, has been barred since 1980 from studying or issuing reports on any part of the insurance industry unless requested to do so by lawmakers.

The officials who disclosed the decision did so on condition of anonymity, saying they were not authorized to pre-empt a formal announcement.

There was no immediate reaction from America’s Health Insurance Plans, which represents insurers.

The move to strengthen the FTC’s authority is on top of an earlier decision announced by House Speaker Nancy Pelosi, D-Calif., to strip health insurance companies of antitrust exemptions relating to price fixing, bid rigging and market allocation.

Advocates of both changes argue they would result in pressure on insurance companies to keep premiums lower than would otherwise be the case.

“In order to generate robust competition in the health insurance industry it is essential that we eliminate these special protections that are unique to the insurance industry and shield it from scrutiny over anticompetitive practices,” said Rep. Chris Van Hollen, D-Md., one of the lawmakers involved in discussions on the issue.

Pelosi and other Democrats unveiled long-awaited legislation on Thursday to remake the nation’s health care system. A vote is possible by the end of this week.

Unlike in the House, health care legislation expected to reach the Senate floor later this year leaves the industry’s antitrust exemptions untouched. Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee, is expected to try to remove them once debate begins. It is not clear what attempt, if any, might be made in the Senate to loosen the restrictions on the FTC.

Federal law says the FTC has authority to conduct studies and prepare reports relating to insurance “only upon receiving a request” from a majority of the Senate Commerce or House Energy and Commerce committees.

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