On the recordFebruary 24, 2010
This legislation attempts to solve a problem that doesn't exist. First, there is no evidence that the exemption has increased health insurance prices or profits or that it has contributed to higher market concentration. Second, the effort to repeal McCarran-Ferguson is based on the belief that it allows individual insurers to collude on prices and policy coverage. State laws prohibit insurers from bid-rigging, price-fixing and market allocation to restrain competition. State insurance regulators actively enforce the prohibition in these areas, and this legislation would only add another layer of Federal regulation and litigation to an industry that operates under a robust and well-established State regulatory regime. There are ways, however, to promote competition in the health insurance market. One change Congress should consider is permitting individuals and businesses to buy their health insurance policies from any willing provider in any State. Under current law, an insurance firm registered in one State may not cover individuals in another without registering in the second State and being subject to all its taxes and laws. This raises the cost of doing business across State lines, and it prevents many smaller or mid-sized companies from entering the markets to compete. Simply put, this is not the type of reform that is needed, and it is not the type of reform that Americans were promised.
