The McCarran-Ferguson Act of 1945 exempted insurers from federal anti-trust laws provided that states and their insurance commissions policed any anti-competitive conduct.
Now, in 2009 we see the results in the health insurance industry of these decades of anti-trust exemptions.
* UNSUPPORTED FEAR. Fear that the federal government may prove to nimble as a competitor.
The irony of the opponents of healthcare reform say out one side of their mouth that the federal government will have an unfair competitive advantage.
And, then tomorrow, they will say out the other side of their mouth that the federal government cannot provide a viable service because of its bloated inefficiencies.
* DRAIN ON OUR ECONOMY
As much as 18% of our GDP is devoted to healthcare. This compares to these bastions of socialist, government-run, healthcare:
- Germany: 10.4%
- UK: 8.4%
- Canada: 10.1%
Socialist, government-run, healthcare systems operating more efficiently than an industry enjoying anti-trust exemptions?
INCREASED SAVINGS for THEM, DECLINING SERVICE DELIVERY FOR US
Health insurance companies devoted more than 95 cents of each of our premium dollars to providing healthcare for our needs.
Devoted. Past tense. This rate of 95% medical loss ratio was in the early 1990’s.
Now, health insurance companies only pay about 81 cents of each premium dollar on actual medical care. The rest is consumed by rising profits, grotesque executive salaries, huge administrative expenses, the cost of weeding out people with pre-existing conditions and claims review designed to wear out patients with denials and disapprovals of the care they need the most. Wendell Potter, The insurance industry’s lethal bottom line.
This represents a savings of $110 billion a year. And a loss of $110 billion a year in healthcare for us.
* UNAFFORDABLE PRODUCTS. Health insurance is becoming increasingly unaffordable.
- 20% of Americans under the age of 65 were uninsured in 2005. PBS
- 45 million were uninsured in 2008.
- 86.7 million Americans, 1 out of 3 of us under 65, went without health insurance in 2007 and 2008. - CNN
* HUGE MARKET of CUSTOMERS UNSERVED.
This is a huge market of customers and revenues that for some reason has failed to inspire affordable innovations for these potential consumers of the health insurance industry.
How huge?45 million Americans x $100 a month in premium costs =
- Market of $4.5 Billion, PER MONTH
- Market of $54 Billion, ANNUALLY
Anti-trust exemptions for the health insurance industry has created a market equal to $54 billion annually. And the health insurance gives out a collective yawn. And why shouldn't they? They are exempt from anti-trust provisions. And in their world, that means they are exempt from competition.
Why would an industry ignore a market of such magnitude unless they were not only exempt from anti-trust provisions, but exempt from competition itself?
For that matter, why would an industry create this market?Why would this industry spend 40% more on lobbying this year to maintain these anti-trust exemptions that leaves $54 billion on the table, $54 billion out of their pocket, each year?
A statement from the drugmaker explains: We believe that the private health care marketplace fosters competition, innovation and consumer choice.But, clearly that’s not true, now is it?
What kind of competitive industry makes no effort to innovate products to meet the unmet demand in a market worth $54 billion?
One that's exempt from anti-trust and competition, that's who.