Washington, D.C. – Yesterday Congressman Heath Shuler (D-Waynesville) cast a vote to stop the special treatment that insurance companies have received for more than 50 years. The bill, the Health Insurance Industry Fair Competition Act, aims to rescind the privilege insurance companies have that gives them the power to fix prices, partner with competitor companies, and set their own markets without fear of investigation. The bill passed in the House with strong bipartisan support by a vote of 406 to 19.
“There is no question that exorbitant insurance prices are adding insult to injury to American families who are already struggling in our economy,” said Congressman Shuler. “For months, Congress has been attempting to find common-sense solutions to the health care problems in our country. This bill is a levelheaded and rational solution that both Republicans and Democrats can support. By correcting past injustices such as bid rigging and price fixing, this bill will bring new competition to the health care industry and consequently lower premium costs. Today, Congress stood up against insurance companies and for American families.”
More than 400 insurance companies mergers in the last 14 years have resulted in 95% of the health insurance market being “highly concentrated” in states and regions. The American Medical Association found that in 39 states two health insurance companies control at least 50 percent of the market. In nine states, a single company controls 75 percent of the market or more. The Center for American Progress found in June 2009 that in North Carolina two health insurance companies have a market share of 73% of the total insurance industry in the state.
With the anti-trust exemption that this bill eliminates, health insurance companies were able to essentially divide the nation into geographic zones that create local monopolies and leave Consumers little to no choice between insurers. The non-competitive market resulted in insurance premiums more than doubling during the past decade. Nearly 800,000 customers of Anthem Blue Cross health insurance in California learned this week of rate hikes of up to 39%.
The Health Insurance Industry Fair Competition Act will strip these companies of their anti-trust exemptions, and thereby prevent rate hikes and regional monopolies. The bill, which is strongly supported by the Obama Administration, will now move to the Senate for consideration.
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