Justice department welcomes passage of the Competitive Health Insurance Reform Act of 2020

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Justice department welcomes passage of the Competitive Health Insurance Reform Act of 2020

Press releases may be edited for formatting or style | January 14, 2021 Insurance
On Jan. 13, 2021, President Donald J. Trump signed into law the Competitive Health Insurance Reform Act of 2020 (the “Act”), which limits the antitrust exemption available to health insurance companies under the McCarran-Ferguson Act. The Act, sponsored by Rep. Peter DeFazio, passed the House of Representatives on Sept. 21, 2020 and passed the Senate on Dec. 22, 2020.

“We thank the President, the Senate, and the House of Representatives for recognizing the importance of competition in American health insurance markets,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Limiting the scope of conduct exempt from the antitrust laws will strengthen the Antitrust Division’s ability to investigate and prosecute anticompetitive behavior. Americans deserve competition in health insurance markets just as they do in any other industry.”

The McCarran-Ferguson Act exempts certain conduct that constitutes the “business of insurance” from the federal antitrust laws. This exemption has sometimes been interpreted by courts to allow a range of harmful anticompetitive conduct in health insurance markets. The Competitive Health Insurance Reform Act amends the McCarran-Ferguson Act and will assist the Antitrust Division in its mission to enforce the antitrust laws by narrowing this defense and clarifying that, except for certain activities that improve health insurance services for consumers, the conduct of health insurers is subject to the federal antitrust laws.

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The Justice Department has a track record of successfully enforcing the antitrust laws against health insurers. Over the past five years, for instance, the department has enforced the antitrust laws against health insurers involved in transactions valued at over 160 billion dollars. The Act will help the department build upon those successes by requiring health insurers to play by the same rules as competitors in other industries. It will end distracting arguments about when health insurers qualify for the McCarran-Ferguson exemption, and it will enable the Antitrust Division to spend resources more efficiently to achieve results that make a difference for American consumers.

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