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H.R. 372, the Competitive Health Insurance Reform Act of 2017


H.R. 372, the Competitive Health Insurance Reform Act of 2017, would partially repeal the limited
Federal antitrust exemption for the business of insurance established by the McCarran-Ferguson Act in 1945.
H.R. 372 would only permit federal antitrust enforcement with regard to health insurers.

House Democrats have previously supported a full repeal of McCarran-Fergusons antitrust exemption
for all insurers, not just health insurers. In 2010, House Democrats also passed more limited legislation to repeal
McCarran-Fergusons antitrust immunity for health insurers by a vote of 406 to 19. House Republicans had not
previously expressed any interest in moving any version of this legislation.

While there has been and continues to be bipartisan support for the repeal of McCarran-Ferguson with
regard to health insurers, the Majority has made a series of overstated claims regarding H.R. 372 as part of the
so-called third phase of their health care reform efforts. As such, we do not endorse the Majoritys
exaggerated claims that passage of H.R. 372 will somehow create major new competition, significantly improve
the affordability and availability of health insurance, or encourage health insurers to sell insurance products
across state lines. In reality, this legislation:

Will Not Significantly Improve Healthcare Affordability or Coverage. According to the Congressional
Budget Office (CBO), the effect of H.R. 372 on health insurance premiums would probably be quite small,
and enacting the bill will have no significant net effect on the premiums that private insurers would charge
for health or dental insurance. Consumers Union states that the application of the antitrust laws to some
health insurance activity is simply not enough to create a vibrant insurance market because our long
experience shows you cant expect a health care system to run effectively on competition alone.

Does Not Enable Health Insurers to Sell Insurance Across State Lines. Enabling the Federal antitrust
agencies to police certain forms of anticompetitive conduct will not in and of itself incentivize health
insurers to offer products across state lines. In fact, current state and Federal law, including the Affordable
Care Act, already allows states to agree with each other to provide for cross-state insurance sales.

Does Not Protect Consumers Against Discrimination or Premium Growth. H.R. 372 only applies to
certain anticompetitive conduct and does not change the regulation of health insurance. For example, it does
not prohibit discrimination based on preexisting conditions, reduce premium growth, or require health
insurers to be accountable for price increases.

Does Not Provide the Antitrust Agencies with Necessary Resources to Enforce the Law. If the
Administration truly wanted to encourage more vigorous antitrust enforcement in the health insurance
market, they would fully fund and appoint heads to the antitrust agencies. Instead, the President Trumps
recently issued budget blueprint would reduce DOJ funding overall, to the likely detriment of antitrust
enforcement.

Prepared by Democratic staff of the Committee on the Judiciary