The only organizations exempt from the antitrust provisions of the 1945 McCarran Ferguson Act are Major League Baseball and our health maintenance organizations (HMOs). The Obamacare reforms to our healthcare industry did little to address this issue. Critics say this antiquated exemption allows health insurance companies to drive up prices, limit competition, conspire to underpay doctors and hospitals, and price gouge consumers – things which dramatically increase the cost of health insurance. Over the past 25 years, studies have shown that health insurance industry profits are increasing ten times faster than inflation. Industry advocates claim there is little proof of such accusations and that removing the HMO antitrust exemption is unnecessary since these corporations are still subject to state laws and regulations.

However, as proof of the lack of competition in the hospital industry, health advocates cite a study documenting the disparity in hospital charges for routine services such as basic blood work. Prices for a cholesterol test ranged from $10 to $10,169, and a test to measure body metabolism cost $35 at one facility and $7,303 at another. Appendectomies can cost either $1,529 or $186,955 depending on where the procedure is performed. Advocates say these disparities are typical in most other hospital services as well, claiming this kind of extreme price variation is seen in no other industry. They say we should put patients first and demand HMOs compete for their business.

Proposed Legislation: H.R.1418 - Competitive Health Insurance Reform Act of 2020
Prospective Sponsor: Rep. Peter DeFazio (OR)

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