House Set to Formally Consider Partial Repeal of McCarran-Ferguson

SIIA’s Government Relations Staff has learned that the House will most likely vote on legislation next week that would partially repeal McCarran-Ferguson. The bill, HR-3596, the Health Industry Anti-Trust Enforcement Act, seeks to prohibit issuers of health and/or medical malpractice insurance from engaging in any form of price fixing, bid rigging, or market allocations in connection with providing health insurance coverage or coverage for medical malpractice claims or actions. The bill also authorizes the Federal government the ability to prosecute any prohibited actions under anti-trust law.

While healthcare reform remains in limbo, an alternative strategy is to pass incremental changes to our current healthcare system. The House will be considering this legislation as the first step in that process.

If enacted, many medical malpractice RRGs would be forced to stop writing these lines of insurance since they won’t be able to obtain the statistical trend analyses of loss cost data that is critical to the ratemaking process. Without this data, RRGs won’t be able to accurately price medical malpractice insurance and in order to continue placing that type of insurance, prices will have to be raised to reflect the uncertainty of our loss costs for these products. Under a worst case scenario, this could lead to another medical malpractice insurance crisis if enough small and medium size insurers leave the market because of the inability to share statistical trend analyses of loss cost data for use in setting rates.

SIIA’s Government Relations Staff have raised these points with House Leadership, most notably that if the bill is considered, there should be carving out language for RRGs writing liability coverage. Unfortunately the political will of House Democrats is too great by to stop it from passing as is. Our main effort will be to focus on Senate Leadership, Moderate Senate Democrats and key Committee staffers to raise our concerns on the negative direct and indirect consequences this measure would have.

Official Government Report on Healthcare Spending Shows Alarming Data

The Centers for Medicare and Medicaid (CMS) released their annual report that both documents the national healthcare spending for the previous year as-well-as projects spending for the next ten years. The following are the key findings as compiled by SIIA’s Government Relations Staff:

• Healthcare spending for 2009 increased 5.7% compared to an increase of 4.4% in 2008.
• The average person spent $8,407 in 2009 as compared to $7,681 in 2008.
• Healthcare spending increased to 17.3% of GDP up from 16.2%.
• Spending for 2009 increased only 3.3% for private payers compared to an increase of 8.7% by government programs.
• In 2019, national healthcare spending is estimated to be $1.7 trillion, more than double the $918.6 billion projected for 2010.

Update on the Prospects for Healthcare Reform

As reported by SIIA’s Government Relations Staff, the election of Republican Scott Brown in Massachusetts significantly alters the dynamic for the enactment of healthcare reform. As Republicans now control 41 Senate seats, they have enough Senators to block via filibuster passage of any reform offered by Democrat leadership.

While President Obama and Democrat Congressional leadership are still committed to enacting a comprehensive healthcare reform package, the likelihood that they’ll be able to do so has significantly decreased due to the change in the political climate, which has also decreased the appetite for rank-and-file Democrats to continue working on healthcare issues.

Resulting from conversations with sources on Capitol Hill, SIIA’s Government Relations Staff believes the following are the possible scenarios for moving healthcare reform, ranked in their likelihood.

• The House passing the Senate’s reform bill coupled with a “corrections” bill (containing selected House preferred provisions) and having the Senate pass the House’s bill under Reconciliation.Reconciliation is a rarely used budgetary technique that protects a bill from a filibuster in the Senate, requiring only a simple majority to pass.

As Reconciliation is reserved only for issues directly dealing with revenue matters, it is debatable if many of the proposed reforms could be included in a Reconciliation package. 

• The House simply passes the Senates bill and sends it to the President without the “corrections” bill.
• Congress passes separate bills, with each dealing with the non-contentious proposed reforms.
• Congress works on a bipartisan bill that can obtain the support of 218 House Members and 60 Senators.
• Healthcare reform will no longer be considered.

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This entry was posted by Adam V. Russo on Friday, February 5th, 2010 at 10:52 am and is filed under Health Care Legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.