October 30th / November 1st, 2009
"Let’s Play Monopoly"
If you want proof that Congress is collegially corrupted and gratuitously
gridlocked, look no further than Sen. Harry Reid’s recent power play in
which he used the McCarran-Ferguson Act as his weapon of mass distraction.
McCarran-Ferguson (which I will affectionately refer to as “MF”) was
passed in 1945, ostensibly to protect the “business of insurance”. In effect,
the Act established that Federal anti trust laws would not necessarily
apply to companies like our modern day Blue Cross Blue Shield. But MF included
a loophole. It also empowered Congress to pass laws “in the future” that
could essentially regulate health insurance companies. The latter provision
is a sword that Congress hasn’t had to pull until earlier this month. That’
s when Senate Democrats, who saw the public option slipping away, and who
thought they had bent over backwards to accommodate the insurance industry,
were angered when that same industry announced premiums would rise as a
result of healthcare reform.
And so, Reid, along with other Democrat buddies like Pat Leahy, announced
they would seek to repeal any anti trust exemptions that the insurance
industry had enjoyed under MF. The gauntlet that Reid threw down sent momentary
shock waves through the executive offices of health insurance companies.
After all, a loss of the exemption could mean that large monopolies like Blue
Cross might be broken up (much like AT&T had been) and would no longer be
able to legally collude with its few mega-competitors, like United Health
Care and Aetna, to set rates and policies. Obama soon followed Reid into the
fray. Speaking on his radio and internet address, the President bashed
health insurance executives for taking huge salaries and bonuses, “while
enjoying a privileged exemption from our antitrust laws”.
Some observers believe that Obama and Reid are using the threat of
McCarran-Ferguson to force the health insurance lobby into releasing their hold
over hundreds of Congressmen who had been told not to vote for a public
option. Whether the Dems’ sabre rattling is for real, remains to be seen. Either
way, I am angry at old Harry and young Barack for their hypocrisy and
tardiness. They should have played the anti trust card long ago, and fought to
actually make it stick.
As far back as 2006, the American Medical Association went on record
saying that healthcare insurance companies enjoyed a virtual monopoly. Among the
AMA’s findings were examples of a healthcare system controlled by a
privileged few insurance executives. In Maine, only two companies control 88% of
the health insurance market. In Missouri, only two companies control 79%
of the market. In North Dakota, just one company controls 89% of the market.
And across America, 94% of markets are not competitive.
Yet in spite of these staggering statistics, Congress and the White House
have dragged their feet when it comes to reigning in insurance monopolies.
Earlier this year Obama let big pharma off the hook when he agreed not to
press for price breaks to medicare patients, or an open flow of cheaper
drugs from Canada.
So forgive me if I am a bit skeptical about the Administration’s verbal
threats aimed at the insurance industry. For all we know, MF is just a
smokescreen to ensure that the uninsured get coverage. Or, it could be an effort
to get a weakened form of public option that is more like a co-op program
which each state can opt out of. I hope I’m wrong about Reid and company’
s motives, but something tells me when the dust settles, the big insurance
companies will still be free to raise premiums anytime they wish, and
continue to monopolize the markets, no matter which version of healthcare
reform passes. In addition, if Obama does make a deal to mandate coverage for
everyone, companies like Blue Cross will profit even more from the
acquisition of 47 million new customers. And don’t worry if the formerly uninsured
population can’t pay for their new coverage, because the rest of us will be
mandated to subsidize them.
Teddy Roosevelt, the original trust-buster, must be spinning in his grave
at Obama’s lack luster and duplicitous use of the bully pulpit to weaken
the health insurance monopolies. Meanwhile, the insurance industry is
spinning legislation designed to improve their bottom line by denying coverage to
those of us who are trying to stay out of the grave. Appropriately, all
this talk of grave spinning comes on the heels of Halloween. That’s the
season in which politicians like Reid can trick us with hollow bravado, leaving
us alone to hand out big treats to insurance companies. It’s enough to bust
a man’s trust in government.
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