Democrats declare war on health insurers
By: Susan Ferrechio
Chief Congressional Correspondent
October 25, 2009
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| (AP file photo) |
Congressional Democrats have declared war on the nation's health insurers, drafting legislation to revoke the industry's 64-year-old antitrust exemption, part of what critics say is a White House effort to coerce and threaten their opponents.
Democrats targeted the exemption just days after the insurance industry lobbed a bomb at their health care proposal, saying it would drive individual insurance premiums up by as much as $4,000 annually.
The damning report from America's Health Insurance Plans, infuriated Democrats. Days after the report was issued, White House officials told lawmakers to fire back at the group with their biggest political weapon, legislation to revoke the antitrust exemption.
"It really is unfortunate, this pattern of attempting to intimidate people who don't fall in line with the administration's policies and this is an example of that," said Sen. John Cornyn, R-Texas, vice chairman of the Senate Republican Conference.
Democrats deny Cornyn's charges. Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said his panel was already planning a hearing on revoking the antitrust exemption long before the industry released its critical report. Leahy said the exemption allows price fixing and other unfair practices. The exemption was passed in response to a 1946 Supreme Court decision that ruled insurance was subject to federal antitrust laws because companies do business across state lines. Insurance is now mostly regulated on the state level.
"I don't think anybody is out to get the insurance companies, we are just trying to make them compete," added Sen. Claire McCaskill, D-Mo.
A pattern of intimidation?» Humana - Sen. Max Baucus, a top Democratic health care reform negotiator, has ordered a federal investigation into letters the insurance giant sent to elderly enrollees that warned of potential cuts in benefits under the Democratic health care reform proposal.
» Chamber of Commerce - Some chamber officials believes the White House is encouraging businesses to quit the trade group because of its opposition to global warming legislation and the Democratic health care reform bill. » Fox News - In response to network criticism of the Obama administration, the White House has banned all appearances by administration officials. Obama's top advisers encouraged other media outlets to avoid following Fox and said it is "not really a news station." » Health insurance industry - Congress is moving to revoke the industry's antitrust exemption after it issued a report that criticizes the Democratic health care reform bill.
Sen. Jay Rockefeller, D-W.Va., called the report "the straw that broke the camel's back," after what he said was years of the industry cheating policyholders. "This isn't part of a pattern. We are reacting to them as we should."
House Speaker Nancy Pelosi, D-Calif., announced she would include a provision to revoke the antitrust exemption in the House health care reform bill. Senate Democratic leaders will likely do the same.
"The administration promised during the campaign that they were going to usher in an era of post-partisanship here in Washington, but what they're doing is really flat-out despicable," House Minority Leader John Boehner, R-Ohio, said.
The move against the insurers stunned industry experts.
"My first reaction when I saw what was going on was that this is just very odd, because this exemption has had no impact on what is going on in health care and to repeal it won't achieve anything," said Scott Harrington, a health policy professor at the University of Pennsylvania's Wharton School and a scholar at the free-market American Enterprise Institute.
Insurance company lobbyists say they are still working with Democrats on health care reform, particularly on a provision that requires Americans to have insurance or face fines with subsidies for poor families.
"Clearly we are seeing an effort to make the insurance industry into the enemy," acknowledged a top health care lobbyist who requested anonymity. "But I believe the differences are not as large as what is being reported and I believe they are still bridgeable."
