As House of Representatives Introduces Health Care Bill, DeGette Writes that the Barriers to Competition Must Come Down

WASHINGTON – As the House of Representatives introduces H.R. 3962,  the Affordable Health Care for America Act, U.S. Rep. Diana DeGette (D-CO), Vice Chair of the Committee on Energy and Commerce, today offered the following statement:

“Our health care bill will improve competition in the health insurance market and rein in rising costs for American consumers,” said DeGette. “A public option will offer a choice of health insurance while providing more Americans with health care coverage.  The bill we are introducing today meets President Obama’s principles for health reform, and most importantly, it expands access to high quality, affordable health coverage for millions of Americans.”

With the introduction of the House health care bill, U.S. Rep. DeGette published the below opinion editorial on tearing down the barriers to competition in the health insurance market in HuffingtonPost.

Rep. Diana DeGette
Posted: October 29, 2009 10:37 AM

Tearing Down the Barriers to Competition
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Congress is on the brink of passing legislation that will truly reform the health insurance market. Reform will improve competition and reign in rising costs, while providing millions of uninsured Americans with access to high quality health care. Competition is the crux of the debate - the lack of competition in the market has hurt consumers, and has contributed to rapidly escalating health care costs. Every year, health care premiums consume a larger portion of Americans household budgets. By tearing down the barriers to competition, for example, by repealing an antitrust exemption and creating a strong public insurance option, Congress can achieve the goals of lower costs and improved health care outcomes.

As premiums continue to skyrocket, we must ensure that health insurers are not engaging in anticompetitive behavior and unfairly driving up health care costs. Since 1945, the health insurance industry has enjoyed an exemption from federal antitrust law. This exemption prevents the application of federal antitrust laws to the business of insurance, provided that the activity is regulated by state law and is not designed to boycott, coerce, or intimidate. Despite the fact that the health insurance industry is highly concentrated, the federal government is handcuffed in its ability to identify or respond to any potential violations. The American Medical Association estimates that 94 percent of the top insurance markets are anticompetitive. In Pueblo, Colorado, for instance, one insurance company controls over 75 percent of the market. Yet the Department of Justice currently does not have the authority to investigate the industry to determine if anticompetitive violations are occurring.

To protect consumers from such unfair practices, House Judiciary Chairman John Conyers (D-MI) and I introduced The Health Insurance Industry Antitrust Enforcement Act. This measure would repeal the insurance industry's immunity in instances of price fixing, bid rigging, and market allocation by health or medical malpractice insurance issuers. These potentially egregious violations should not be permitted to occur in any industry, and the federal government should be given the power to protect the public from harmful behavior that drives up prices. President Obama recently voiced support for our efforts, criticizing health insurance companies for "earning [large] profits and bonuses while enjoying a privileged exemption from our antitrust laws, a matter that Congress is rightfully reviewing." In conjunction with House leadership, we expect to fold our provision into the broader health care proposal currently moving through the House.

Congress is also debating the benefits of creating a public insurance option, which would provide much needed competition in the market. Both the House and Senate are poised to approve bills that will include a public option. A recent Wall Street Journal/NBC News poll found that 72 percent of Americans think it is "extremely or quite important to give Americans the choice" of health care plans, while a Washington Post/ABC News poll shows that a majority of Americans - by a margin of 57 percent to 40 percent - support a public option. Offered within a health insurance Exchange, a public option would compete on a level playing field against private insurance companies in order to reduce costs. It would not come close to replacing private industry; rather it would simply provide Americans with another choice that will likely be more innovative and affordable than the options currently available. A public option is essential to creating the cost-savings necessary to offset the cost of providing all Americans access to affordable health care.

Reforming our health care system begins with tearing down the barriers to competition in the health insurance market. Without competition, as in the form of antitrust reform and a public option, our health care costs will continue to rise at rates that are unsustainable. U.S. premiums have risen already by the dramatic rate of 87 percent over the last six years. This is simply untenable. We must begin removing barriers to competition by moving forward with market reforms that will improve competition and hold down costs.

U.S. Rep. Diana DeGette, serving her 7th term as the Representative of First Congressional District of Colorado, is the Vice Chair of the Committee on Energy and Commerce.