WASHINGTON – A bill announced to amend the McCarran-Ferguson Act could hurt consumers in the important medical professional liability insurance market, according to the Property Casualty Insurers Association of America (PCI) in a press release.
While debate on broad ranging health care legislation has been delayed, Congressman Tom Perriello (D-VA) and Congresswoman Betsy Markey (D-CO) have introduced a stand alone bill to remove the limited antitrust exemption for health and medical professional liability insurers under the McCarran-Ferguson Act of 1945.
“This attack on McCarran-Ferguson misses the mark,” said Ben McKay, senior vice president of PCI said in the press release that was posted on PCI’s web site. “Enforcement of insurance is conducted at the state level because insurance is regulated at the state level. This bill will add another layer of duplicative oversight that in the end will cost consumers.”
The press releases states the McCarran-Ferguson Act delegates insurance regulation and enforcement of antitrust laws to the states. Every state has a comprehensive insurance code that governs the insurance industry, including subjecting the industry to strict antitrust enforcement. Proponents of the bill have used misguided information in public debate. McCarran-Ferguson allows property and casualty insurance companies to share costly and detailed historical risk data in a way that allows them to set premiums at a level that ensures they will be able to afford all potential payments to policyholders. This fosters competition in the industry by allowing smaller companies access to this data, which they could not afford to produce on their own.
“Targeting McCarran-Ferguson will not provide benefits to consumers or the marketplace,” said McKay. “This bill will not lower health care costs; on the contrary, it may well increase them, according to a recent Congressional Research Service report. It will not expand insurance coverage either. Instead, it threatens to cause enormous marketplace disruption that would have the perverse effect of discouraging new market entrants, making it harder for smaller companies to stay in business, and driving more costly litigation into the system.”
Without this data-sharing ability, many medical liability insurers may be forced to leave the market, which will not only impact doctors and hospitals, but also many other types of health care providers that rely on access to a competitive medical liability insurance market, including dentists, nurses, optometrists, paramedics, x-ray technicians, and nursing homes, among others.
At a time when Americans are calling on their government to get health care costs under control, this legislation could increase those costs and ultimately create another medical liability availability crisis.
“This bill could prove flammable,” said McKay. “Revisiting McCarran-Ferguson could reignite a medical malpractice crisis. To amend McCarran’s antitrust provisions without evidence of the need, but with plenty of evidence of the potential harm, would be irresponsible and would drive up health care costs,” said McKay.