Sunday, November 08, 2009

Repealing the Anti Trust Provision

A few posts back, I mentioned that I was happy with talk of removing the Anti Trust Exemption (The McCarran-Ferguson Act of 1945).

As I said that something really started nagging at me.

While readint the Wall Street Journal's take on the issue, the nagging little issue jumped out into the open.

The anti-trust laws of the trust busting era were about interstate commerce. Insurance, as we keep hearing in the debate, is regulated by the states. It is the federalization of the regulation that keeps people from being able to buy insurance across state lines.

Insurance is intrastate commerce, while the anti-trust laws were aimed at interstate commerce. The current system had the fifty states regulating insurance; So the McCarran-Ferguson Act was largely a re-affirmation of the 10th ammendment.

The WSJ piece mentions that the anti-trust exemption only applied to states that had anti-trust laws similar to the federal government. Which means that the exemption was simply pulling out a redundancy.

The WSJ piece further argued that the anti-trust exmemption is not quite what people think it is. The exemption was designed to allow insurance companies to exchange actuarial information. As such, the repeal of the exemption may not induce more competition as one would hope.

I guess I should conclude with comments on the Medical Savings and Loan. The MS&L simply is a structure to help individuals save for their medical expenses. The actual negotiating of bills and payment of expenses takes place between the patient and doctor.

Since the accounting is done on an individual basis (opposed to a group basis), I really don't see any forces toward monopoly. Individuals are likely to seek radically different approaches to their care. The companies offering the MS&L will be more like the myriad of credit unions that exist today.

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