Insurers Defend Anti-Trust Exemption with 36-Year-Old Data
As Daphne pointed out, the insurance industry’s witness at yesterday’s Senate Judiciary Committee hearing to examine a law exempting health insurers from
Jul 31, 2020293.2K Shares4.3M Views
As Daphne pointed out, the insurance industry’s witness at yesterday’s Senate Judiciary Committee hearingto examine a lawexempting health insurers from federal anti-trust rules was none-too-comfortable defending that exclusion from Democratic attacks. But you didn’t have to watch the proceedings to learn that University of Arkansas professor Lawrence Powell, representing the Physician Insurers Association of America, had a tough sell to make. His written testimonygave it away — notably the passage that cites a 36-year-old academic article as evidence that the anti-trust exemption bolsters competition, rather than stifling it as Democrats have charged.
“„The role of the limited antitrust exemption provided by the McCarran Ferguson Act is to increasecompetition by promoting the characteristics of competitive markets described above. From all indications, the law has been remarkably successful in achieving this objective. Numerous studies conducted by academic and government researchers find that insurance markets are highly competitive (e.g., Joskow, 1973).
The age of the study wasn’t lost on Sen. Sheldon Whitehouse (D-R.I.), who was quick to challenge Powell about his dated citation. That exchange:
“„Whitehouse: “Do I have the date of that article correct — it’s 1973?”
“„Powell: “Um, I believe so.”
“„Whitehouse: “And so, necessarily, any of the data on which that article would rely for that conclusion would be pre-1973 data, correct?”
“„Powell: “Um, for that article, I would suppose it is … I also cite two of my own studies earlier in the testimony, that are much more recent.”
Next to question Powell was Sen. Al Franken (D-Minn.), who asked the professor whether the highly concentrated insurance market — in which single companies can dominate in many regions of the country — is indicative of healthy competition.
“Do you believe having 90 percent of a market dominated by a single insurer meets your definition of a competitive market?” Franken asked.
“First of all, I’ll say that I’m not aware of that 90 percent number,” Powell responded. “I’ll take your word for it.”
Said Franken: “This is post-1973.”
Paolo Reyna
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Paolo Reyna is a writer and storyteller with a wide range of interests. He graduated from New York University with a Bachelor of Arts in Journalism and Media Studies.
Paolo enjoys writing about celebrity culture, gaming, visual arts, and events. He has a keen eye for trends in popular culture and an enthusiasm for exploring new ideas. Paolo's writing aims to inform and entertain while providing fresh perspectives on the topics that interest him most.
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