Democrats Push Reluctant Obama To End Antitrust Exemption For Insurance Companies

January 14, 2010 3:24 p.m.

With the public option now a distant memory, a group of House Democrats are now insisting that President Obama and Congressional leaders adopt separate measures to ensure competition in the health insurance market. Thirty four Democrats, lead by Rep. Peter DeFazio (D-OR) have signed their names to a letter, obtained by TPMDC, demanding that health care legislation include a provision repealing the industries antitrust exemptions.

“Since we all agree that containing the rising cost of health care is one of the overriding goals of health reform, we insist that the House demand an alternative cost cutting tool,” the letter reads. “One tool that stands out for attracting strong bipartisan support is removing the current antitrust exemptions enjoyed by the health insurance industry.”

The House must insist on the House language that repeals the health and medical malpractice insurance industries’ exemptions from all federal antitrust laws. Subjecting the health and medical malpractice insurance industries to the antitrust laws is a vital step toward reforming health care, lowering prices for consumers and doctors, and leveling the playing field for American businesses. The Consumer Federation of American has said that consumers would save over $40 billion in insurance premiums if the antiquated law was repealed for all lines of insurance. It is estimated that subjecting the health insurance industry to federal antitrust laws would lower premiums by 10%.

President Obama says he supports the idea in principle. But unfortunately for House Democrats, Sen. Ben Nelson (D-NE) wants to maintain the exemptions, and with his vote absolutely necessary to pass health care reform, ending them completely will be a tough sell. Health care negotiators are working on a watered down approach to the issue–one which is unlikely to satisfy the signatories to this letter, but which Obama seems inclined to accept.

“I’m entirely supportive of that,” Obama told DeFazio during a Democratic caucus meeting tonight, according to a Democratic aide. “But I want 60 votes in the Senate. I’m trying to get it done, I’ll leave it at that.”

You can read the entire letter here.

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