Monday, October 15, 2012

Repeal The McCarran-Ferguson Act

Anyone with sufficient information and basic intelligence now realizes that ObamaTax needs to repealed.  The debate as to whether or not it should be replaced is another issue.  Yes, it needs to be "replaced", but not with more legislation; it needs to be replaced with free market solutions such as the ability to purchase insurance in any of the 50 states.  It needs to be replaced:

1.  With higher limits on HSA contributions and easier access to HSA's (ObamaTax does the opposite).
2.  With different types of insurance products (that the free market will provide) for different types of situations, such as a very high deducible policy with very low premiums for only catastrophic events (this product does not currently exist in New York State).
3.  With an individual market of various high-deductible insurance plans instead of the comprehensive insurance purchase mandates by the federal government.
4.  With associated payment plans (similar to the paydown of a loan) toward the high-deductible.  Also, one should be able to deduct the interest charged from this product on their federal taxes.
5.  With tax benefits for those that maintain HSA's (such as the ability to contribute with pre-tax dollars to a personalized, portable HSA where one also maintains their bank, credit lines/loans, and retirement accounts).

Other counterproductive legislation (redundant?) needs to be repealed as well.  The McCarran–Ferguson Act was passed by Congress in 1945, and has wreaked havoc on individuals purchasing health insurance and health care ever since.  It confines one's ability to purchase health insurance products to their state of residence only, leaving the other 49 states unable to compete for someone's business.  As Representative Paul Gosar (R-AZ) has illustrated, this also must be repealed in order to:

1.  Restore competition among health insurance companies as it corrects an historical error that granted an exemption to health insurance companies from federal anti-trust and unfair competition laws.
2.  The McCarran–Ferguson also prohibits class action suits against health insurers in antitrust lawsuits, but it maintains legal enforcement actions for wronged individuals on a case by case basis.

Similar to The Patient Destruction and Unaffordable Care Act, The McCarran–Ferguson Act (or at least the majority of it) hurts us far more than it helps us.  Mark Levin commonly states that "everything the government touches turns to crap!"  Not only is this statement true, but it is also attributed to a very unlikely source; Beatles drummer Ringo Starr.  Congress need not "let it be" and repeal legislation that:

1.  Restricts supply.
2.  Increases demand.
3.  Inevitably raises costs, allowing Congress the ability to blame the market for their own failures.

This also illustrates the cowardice of the Democrat Party leadership.  They knew that repealing this law in 2009 would help reduce costs by fostering a more robust market, however they completely failed to do so, as outlined in this Slate article.

3 comments:

Anonymous said...

Democrats have failed us...again!!! Instead of opening up the health insurance market and lowering costs by allowing for more competition......they decided to take over the healthcare market entirely.

Anonymous said...

Here is a link that just shows how Democrats have failed us again. They had the White House, Senate, and House of Reps for 2 years!!!!

http://www.crowell.com/NewsEvents/AlertsNewsletters/all/1351356

Bill To Repeal Mccarran-Ferguson Act Antitrust Exemption For Insurance Business Introduced

Mar.01.2007

A bipartisan group of senators has introduced Senate Bill 618, the Insurance Industry Competition Act of 2007 to repeal the 60 year old McCarran-Ferguson Act’s partial antitrust exemption for the insurance business. Leading Senate members Leahy, Lott, Reid and Landrieu, who hold leadership positions in the Senate and on the Judiciary Committee, introduced the bill on February 15th.

The McCarran-Ferguson Act was passed in 1945 and provides that the antitrust laws, including the Sherman Act, the Clayton Act, and the Federal Trade Commission Act, shall apply to the “business of insurance” to the extent it is not regulated by a state, and shall also apply to boycotts, coercion and intimidation. As construed by the courts. As interpreted by the courts, the law exempts the business of insurance from government and private antitrust liability, unless the conduct is unregulated by a state or goes beyond otherwise actionable restraints of trade to constitute boycotts, coercion or intimidation.

Litigation under the MFA has long centered on three key issues. The first is whether the – (1) whether the activity at issue involves the “business of insurance”, since all activities of insurers are not included in that phrase. Health plans’ provider contracting actions, for example, have been ruled outside the “business of insurance” and therefore have not been considered exempt from antitrust.
The second is whether conduct is state regulated. This issue could arise, for example, if an antitrust action were brought with regard to Medicare Advantage plan or Medicare Prescription Drug plan activities. Third, the exemption will not apply, even to activities within the insurance business that are state regulated, if the conduct amounts to a boycott, coercion or intimidation.

The McCarran-Ferguson Act exemption from the antitrust laws has long been criticized as giving an unwarranted exception to the insurance industry that is not available to other sectors of the economy. Health care providers, in particular, have been vocal in criticizing the exemption as unfair, while they are subject to frequent antitrust investigations and challenges to their conduct.

In practice, the exemption has been more important over the years to sectors of the property and casualty insurance business, particularly in the past when rating bureaus were used widely. In the health insurance field, a McCarran-Ferguson exemption defense has been relied upon successfully only occasionally, such as a Rhode Island case involving allegedly anticompetitive minimum enrollment terms included in group policies issued by a large health plan that were claimed to have an exclusionary effect on smaller health plans.

The bill would not alter the application of the McCarran-Ferguson Act to the non-antitrust components of the Federal Trade Commission authority, such as its consumer protection enforcement directed at false advertising. So, even if the bill were to become law, insurance advertising that is subject to state regulation would not be subject to FTC oversight.

Anonymous said...

Two more links. If they (Congress) just repealed this crap and got out of the way it would solve the majority of our problems.....instead they sit around and talk and lie and blame and it never ends......

http://www.americanbar.org/content/dam/aba/administrative/antitrust_law/comments_amc-mccarranferguson.authcheckdam.pdf

http://www.gao.gov/new.items/d05816r.pdf

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