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DOJ Varney Questions Antitrust Exemption For Insur Cos [View All]

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Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Oct-14-09 02:33 PM
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DOJ Varney Questions Antitrust Exemption For Insur Cos
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Source: WSJ

WASHINGTON (Dow Jones)--The Justice Department's top antitrust enforcer on Wednesday questioned the need for a long-standing federal antitrust exemption for health insurance and medical malpractice insurance companies, but she stopped short of endorsing legislation to end the exemption.

"The Department of Justice generally supports the idea of repealing antitrust exemptions," Assistant Attorney General Christine Varney said in testimony to the Senate Judiciary Committee. "However, we take no position as to how and when Congress should address this issue."

Lawmakers in the House and Senate have introduced identical bills to strip the antitrust exemption for insurance companies, which was enacted in the McCarran-Ferguson Act of 1945.

The legislation would strip the exemption for egregious violations, such as price fixing, bid rigging and market allocation.

The bill's text indicates that it wouldn't affect the ability of states to regulate the insurance business.

Varney said repealing the exemption "would allow competition to have a greater role in reforming health and medical malpractice insurance markets than would otherwise be the case."

"There are strong indications that possible justifications for the broad insurance antitrust exemption in the McCarran-Ferguson Act when it was enacted in 1945 are no longer valid today," she said.

Sen. Charles Schumer, D-N.Y., called on his colleagues to add the antitrust legislation as an amendment to the health-care bill that Sen. Majority Leader Harry Reid, D-Nev., plans to bring to the floor later this month.

Reid made an appearance at Wednesday's hearing and offered strong support for stripping the antitrust exemption.

"Let's get this out of committee as quickly as possible and let's pass it," Reid said.

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