Reply #19: support The Medical Malpractice Insurance Antitrust Act of 2005 [View All]

Statement Of Senator Patrick Leahy
The Medical Malpractice Insurance Antitrust Act of 2005
July 28, 2005

http://leahy.senate.gov/press/200507/072805a.html

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Some of my colleagues in the other body seem content to echo the refrains of the insurance industry and heap blame for the problem of rising insurance premiums rates on trial lawyers and the victims of medical malpractice themselves. I have opposed arbitrary caps on damages because they will inflict additional harm on the most vulnerable victims of medical malpractice.

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As this study makes clear, high malpractice insurance premiums are not the result of malpractice lawsuit verdicts. They are the result of investment decisions by the insurance companies and of business models geared toward ever-increasing profits. I hope that this study once and for all shines light on the real culprit in rising malpractice insurance rates and informs the Senate with solid evidence of the best way to assist the good doctors who commit their professional lives to caring for others. I ask unanimous consent that the Executive summary of the study be inserted into the Record.

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But another fact of the insurance industry’s business model requires a federal legislative correction—its blanket exemption from federal anti-trust laws. Insurers have for years enjoyed a special benefit in our marketplace. The McCarran-Ferguson Act permits insurance companies to operate without being subject to most of the Federal antitrust laws, and our Nation's physicians and their patients are suffering from this special treatment. Using their exemption, insurers can collude to set rates, resulting in higher premiums than true competition would achieve – and because of this exemption, enforcement officials cannot investigate any such collusion. If Congress is serious about controlling rising premiums, we must revoke this blanket exemption created in the McCarran-Ferguson Act.

That is why today I introduce the “Medical Malpractice Insurance Antitrust Act of 2005.” I want to thank Senators Kennedy, Boxer, Corzine, Durbin, Feingold, Mikulski, Obama, Rockefeller, and Salazar for cosponsoring this essential legislation. Our bill modifies the McCarran-Ferguson Act for the most pernicious anti-trust offenses: price fixing, bid rigging, and market allocations. I am hard-pressed to imagine that anyone could object to a prohibition on insurance carriers’ fixing prices or dividing territories for anticompetitive purposes. After all, the rest of our Nation’s industries manage either to abide by these laws or pay the consequences.

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edit: the study can be found at

http://www.centerjd.org/