• The Disproportionate Popularity of Repealing Insurers’ Antitrust Exemption

    Jenny Gold’s Kaiser Heath News piece today on the antitrust exemption is worth a read. She rounds up the opinions and, more importantly, explains what the exemption does and doesn’t do. It’s pretty clear that repealing it, though popular, won’t do much to solve the health care cost problem, nor could it (as I’ve explained before).

    The article quotes Scott Harrington (who, by the way, has a blog):

    “This is just barking up the wrong tree for health insurance,” said Scott Harrington, a professor of health care management at the Wharton School at the University of Pennsylvania. While many lawmakers are eager to pass some kind of health care bill, they “don’t have a clue how the antitrust exemption works. It might sound good, but I can think of very few things in the bill that would be less consequential for consumers of health insurance.”

    I’ve been saying the same thing to reporters when they ask me about antitrust repeal, only Harrington said far more artfully. And what does CBO think? Gold writes,

    An analysis by the Congressional Budget Office estimated that repealing the antitrust exemption for health insurers “would have no significant effects on either the federal budget or the premiums that private insurers charged for health insurance.” The CBO found that premiums might increase or decrease, “but in either case the magnitude of the effects is likely to be quite small.”

    Repeal of the exemption is popular, but like a lot of things done in anger, it isn’t particularly wise and won’t be very effective.

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    • If it has no effect, but simply places the insurers on the same legal footing as any other private enterprise, why NOT do it?

      • @Dollared – Quite right. Why not? There’s at least a concern it will do some harm in some markets (CBO says as much, as have I). But, on the whole, it isn’t expected to do much harm or good. The danger is that Americans don’t know it and might think this constitutes serious reform. It is not. It is hardly anything. I’d rather see Democrats get back to the serious business of governing.

    • In the industry we laugh at this (“please mr congressman, don’t take away my antitrust exemption!”). It wouldn’t affect us at all. But it is telling that the Democrats are pursuing it, because there are two possible explanations as to why they would: they know it won’t do anything to control costs but it would give the appearance that they are doing something, or alternatively, they actually think there is monopolistic, ant-competitive behavior going on and this will be effective. If the former, then they are practicing a shameful, cynical brand of populist politics, if the latter then we are screwed, because we’re giving more control of our health care system to people who haven’t the slightest clue how to fix it.

      In either case it is a pretty strong blow against entrusting the current Congress with fixing our broken health care system.