Back during the 2008 Presidential Campaign, Senator Obama and Senator McCain talked about how they would fix healthcare. While Senator Obama endorsed “the Public Option”, Senator McCain promoted the Republican “free-market” solution: “allowing insurance companies to compete across state lines”, presently restricted by Federal law, which would “increase competition and reduce prices”.

For nearly a year, and as recently as this past August, Republicans were still arguing that the cure to all our healthcare woes was simply allowing insurance companies to do business across state lines. But the mean old government won’t let the poor innocent insurance companies from trading across state lines, thus creating near monopolies in each state, which drives up prices. By “allowing” insurance companies to sell policies across state lines, you would create more competition, thus lowering prices. Viola’!

Sounds simple enough, right? Even seems to make sense.

Here’s the back-story: This all goes back to something called the “McCarran/Ferguson Act of 1945”. Briefly, since each state sets its own insurance regulation laws, how was one state supposed to regulate insurance policies sold in another state? A policy that met all of California’s standards might not have met all of Texas’ standards. So a law was passed prohibiting insurance companies from selling policies across state lines. The insurance companies WANTED this. Not only did it give them state monopolies across the country, but Federal Anti-Trust exemption would have to be added to protect them from breaking the law prohibiting monopolies since they would naturally result through no fault of their own. As long as they abided by state regulations, they would remain exempt from Federal law. Sweet!

Flash forward 63 years to 2008. Republicans started campaigning on lifting the ban as a solution to reducing healthcare costs. They told everyone, “we don’t need a government takeover of healthcare” (yawn) to reduces healthcare costs. “Simply lift the ban”. Probably not a bad idea.

So last month, Sen. Patrick Leahy (D-VT) introduced legislation to “repeal the insurance companies anti-trust exemption”. Last Thursday, House Speaker Nancy Pelosi included the Republican proposal as part of the House healthcare reform bill as well:

“It will include the Leahy amendment which is eliminating the exemption of health insurance companies … from antitrust law,” Pelosi said, referring to a Senate provision authored by Senate Judiciary Chairman Patrick Leahy (D-Vt.).

Republicans want to revoke the insurance companies anti-trust exemption, and now Democrats want to too. So everyone should be happy, right?

Of course not! Now that DEMOCRATS want to repeal the insurance companies anti-trust exemption, suddenly the “evil” Democrats want to “take away” the insurance company’s “protection” so they can impose all sorts of federal regulations upon them.

Imagine my surprise when Mike Tuffin, Executive Vice President for America’s Health Insurance Plans (an insurance lobby), made the following comment during this exchange on “Fox News Sunday”:

WALLACE: Mr. Tuffin, your group, the AHIP, the American Health Insurance Plans, issued a study and ran some ads opposing one version of health care reform. The White House said some of the data in your study was misleading. Here’s how President Obama reacted generally to the efforts of AHIP.


OBAMA: The insurance industry is rolling out the big guns and breaking out their massive war chest. They’re earning these profits and bonuses while enjoying a privileged exception from our antitrust laws, a matter that Congress is rightfully reviewing.


WALLACE: Question: Do you review — do you view that reference to possibly taking away your antitrust exemption as a threat, as punishment, for the fact that you’re opposing the president and Democrats?

TUFFIN: No, we don’t, Chris. That is a very limited federal exemption. It has nothing to do — every analyst who has looked at this has said it has nothing to do with competition or costs.

REALLY? Can we quote you on that? After more than a year of Republicans insisting that all we need to do is repeal their anti-trust exemption and the “free-market” would magically lower prices, the VP of AHIP is telling us that it “has nothing to do with competition or costs.” G.T.K., buddy.

And now that Democrats are supporting the repeal, suddenly it is “punishment“, retribution by President Obama for “opposing the president and Democrats”. And what was it when Republicans were proposing it? “A common-sense free-market solution”? My how things have changed in just four and a half weeks.

This is why President Obama’s criticism of Fox “News” is accurate and well deserved.

Also consider… now that the biggest cog in the Republican Health Care Reform Plan is the subject of ridicule by those very same Republicans, and has been publicly dismissed by their friends at AHIP as likely to have little to no effect on health care costs, what is left of the “Republican Healthcare Reform Plan”? It was already “a blank piece of paper” to begin with. But not to worry, Senate Minority Leader Mitch McConnell (R-KY) assured us Sunday on ABC’s “This Week” that “[they]’re going to have a healthcare reform plan” real soon now. Their current plan may be zero pages long, but their next plan will be ten times that! /snark


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