Letter opposing H.R. 4626, the "Health Insurance Industry Fair Competition Act"

February 23, 2010

TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:

The U.S. Chamber of Commerce, the world's largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, opposes H.R. 4626, the "Health Insurance Industry Fair Competition Act," which the Chamber believes is a distraction from the important goal of improving America's health care system, and a bill that would do little to address health care costs.

H.R. 4626 would purportedly reduce health care costs by repealing the anti-trust exemption for health insurance companies. However, misinformation about current law under McCarran-Ferguson Act has permeated the current debate. Under current law, it is illegal for a health insurance provider to engage in price-fixing, boycotts, bid-rigging, market allocation agreements, and other uncompetitive behavior. States already enforce these provisions. Thus this bill will do nothing to protect consumers and is a solution in search of a problem.

Further, the bill could have unintended consequences. Small insurers would be at a great disadvantage in attempting to develop accurate rates, since they would lose access to shared data. Larger insurers would face legal uncertainty and be subject to new litigation. Even worse, insurers may have to suspend quality improvement programs due to these lawsuits as they wait for courts to clarify that some collaboration among companies is acceptable.

The Congressional Budget Office has stated that this type of legislation is unlikely to have any positive effect on health insurance premiums. Rather, this bill could make health insurance more expensive and disadvantage smaller companies, which could lead to even more industry consolidation and less competition, add a new level of litigation into the health care system, and threaten important programs aimed at helping patients get better care.

The Chamber urges the House to reject H.R. 4626 and to consider instead legislation that would lower health care costs, improve the quality of care, and help more Americans obtain access to affordable health care coverage.

Sincerely,

R. Bruce Josten