Eliminate One Law to Improve Healthcare – OK Two.


Columbia, MO – The news is filled gobbledygook that confuses us mere mortal. Today’s word: Antitrust Laws. OK, two words.

 In its most simplistic form, antitrust laws mandate that businesses do not violate the trust of the people by collaborating to fix pricing, discriminate or create monopolies (in this case, not the game). In other words, to prevent companies for violating a “rule of reason,” by causing “actual harm to competition … an unreasonable restraint against interstate commerce.”[i] Not just for being “unfair.”

 So why are insurance companies exempt from the law? A little history and a drum roll please.

By the time of the American Revolution, the insurance industry was well established from its merger beginnings in a London coffee shop. Property, fire and life insurance had become a norm for commerce. Health insurance will matured after World War II, but the groundwork was laid well.

In America, the Founding Fathers needed to decide who should hold the power under this new experimental rule; the state or the national government. A small provision in our new Constitution, the Tenth Amendment, was the compromise. “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

For 321 years companies offering red umbrellas and good hands, while claiming to be our good neighbors, have worked hard for our trust to insurance our property, lives and health. Here ie the rub: Insurance is not a social contract, not a mandate, a privilege; it is a business. Insurance companies are in business for profit.

There is nothing wrong with a profit motive. The problem, initially anyway, was no one wanted to regulate the insurance industry. Fast forward to 1945 and the McCarran-Ferguson Act. This law gave the insurance industry exemption from the series of antitrust laws: The Sherman Act of 1890; the Clayton Act of 1914, amended by the 1936Robinson-Patman Act, and; the establishment of the Fair Trade Commission in 1914.

The Act allows insurers to share loss data to develop pricing, share related business information and be exempt from the antitrust laws as long as the states regulated the industry. What a sweet deal.

Was it really in the public’s best interest to let the foxes guard the henhouse?

Today, The Tea Party Express has been rolling out their anger over a public option for healthcare. Their rallies include “Don’t touch my Medicare” signs next to “Keep government out of my insurance.” Veterans, hold “No Obamacare” signs, but do not what their VA benefits taken away. What is wrong with this picture?

Here is a quick fix. Revoke the McCarran-Ferguson Act. Eliminate the state insurance regulatory offices and rehire all those people to regulate insurance for what it is, interstate commerce.

Oh yes, get rid of the HMOs.

(David is a former manager of a large insurance agency in Colorado, was a Hearing Officer for the Colorado Division of Insurance, has written 12 professional-development textbooks for the industry and has taught insurance programs for over 25 years.)

 


[i] Black’s Law Dictionary. Centennial Edition. St. Paul, MN: West Publishing, 1991. Print.

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About David Rosman

David Rosman is an award winning editor, writer, professional speaker and college instructor in Communications, Ethics, Business and Politics. You can read more of David’s commentaries at ColumbiaMissourian.com, InkandVoice.com and NYJournalofBooks.com.
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4 Responses to Eliminate One Law to Improve Healthcare – OK Two.

  1. Dan C says:

    You forgot one.
    Eliminate the income tax and replace it with a sales tax.
    The cost of whining should be paid at the point of purchase of all goods. When people whine, they get more government. That cost should be reflected at the point where people make their ‘decisions’, and corporations should not be able to deduct the ‘expense’ of coercing people to buy things out of the paychecks of people who buy things (that’s what happens when a corporation gets a tax break).
    Transparency is the key, and feedback related to real costs of products.
    Shared risk is shared risk. Why do we need insurance companies at all if we are willing to put money into a pool to share the risk of something, why do we need someone to get paid to tell us we can’t get our money back out when we need it?
    We are forced to share the risks of people who build houses in hurricane and flood zones when the government declares an “emergency”, yet there are no Tea Parties against help for New Orleans.
    The advertisers love it when people are so confused and angry at the same time. It sells cars and crap. Think of Glenn Beck and Rush Limbaugh and the Mouthpiece of Empire (NYT) as being just like that air that blows in your face when you walk into the department stores: These things are there to throw your subconscious into action and make you nervous and disoriented. When you feel that way, the only relief is when you regain control by paying a cashier for the right to leave the store again.
    The only way out of this is for the government to buy the insurance companies and be done with it; but they can’t because the insurance companies have already bought the government.

    • inkandvoice says:

      Two things are apparent from your note. 1) you have not, like many Libertarians and other anarchist, really looking into the “Fair Tax” very well. The conclusion by governement, conservative and liberal think tanks, and the Wall Street Jouornal (conservative) is that the Fair Tax is anything expect it is not fair. There is a major disparity to those in the lower 65% income bracket.

      2) You don’t understand insurance, like most Americans. I was in the business for more than 20 years as an agency manager, regulator with the state of Colorado, taugh insurance for two colleges and wrote over a dozen professional textbooks for the industry. You cannot just “shut them down.” There needs to be some better plan. A single payer plan is, in fact, the best idea. This will still allow the insurance companies to provide supplimnet insruance as they currently do with Medicare.

      I do appreciate your comments and thoughts, and as always your comments.

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  3. Issac Maez says:

    This is getting a bit more subjective, but I much prefer the Zune Marketplace. The interface is colorful, has more flair, and some cool features like ‘Mixview’ that let you quickly see related albums, songs, or other users related to what you’re listening to. Clicking on one of those will center on that item, and another set of “neighbors” will come into view, allowing you to navigate around exploring by similar artists, songs, or users. Speaking of users, the Zune “Social” is also great fun, letting you find others with shared tastes and becoming friends with them. You then can listen to a playlist created based on an amalgamation of what all your friends are listening to, which is also enjoyable. Those concerned with privacy will be relieved to know you can prevent the public from seeing your personal listening habits if you so choose.

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