Anti-Trust Laws to Cover Private Health Insurance Plans in the US

The healthcare reform proposal in the US is expected to make private health insurance plans in the country more comprehensive and reasonable when it comes to claims. To many experts, consumers, and industry critics, subjecting the health care insurance industry to antitrust laws would be beneficial.

John Doe, a 30-year old freelance writer based in New York recently had an unplanned check up with his doctor. He paid $300 for the medical service. When he reimbursed the amount from his healthcare insurer, the company only handed him $200. The insurance firm claimed that the amount it paid was the service’s ‘usual and customary rate.’ In this case, there was clearly a $100 hole in John’s claim. Policy owners of private health insurance plans normally encounter such problems across the entire United States.

You might ask the identity behind the ‘usual and customary’ rates for medical services. It is not actually a person but a database. Many experts assert that the database used for such rates are intentionally skewed to push rates downward. This is made possible through the faulty information collected for the system. Many observers also raise doubts about adequacy of audits and appropriateness of pooling procedures for data collection used in such databases. It is not surprising that several health care providers use artificially low rates so that reimbursements could be low-balled.

In 1945, a legislation called the McCarran-Ferguson Act exempted private health insurance plans from existing federal anti-trust laws. After many decades, there are now proposals to lift that shield to make the health care insurance industry subject to anti-trust legislations that cover all other industries in the country, except of course professional baseball. This is obviously and logically part of the long-standing debate about the currently proposed healthcare reform in the US.

The reform in the healthcare insurance industry would be carried out by the Health Insurance Industry Fair Competition Act, which was passed by House legislators in February 2010. It is still up for final approval and implementation. The bill would make medical and health insurers subject to similar federal legislations that outlaw bid rigging, price-fixing, and basic market allocations that are now imposed across all other industries. This is expected to be raved about by numerous consumers who intend to maximize the use and claims from their private health insurance plans.

Healthcare insurers, for their part, assert that the bill truly is not necessary. They claim that they have already been precluded from basic anti-competitive practices under different state laws. They also claim that most of them do not engage in such unlikely practices anyway.

Consumer advocacy groups, on the other hand, emphasize that problems about health insurance claims would not possibly happen if there were no antitrust exemption that spares the healthcare insurers. Overall, many people hope successfully repealing the McCarran Ferguson law would somehow help ease out the current problems they have regarding their health insurance policies.

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