Repeal the insurance industry's exemption from antitrust laws

A REFORM-MINDED Congress should begin the long road back toward regulation of the nation's financial system by repealing the health-insurance industry's exemption from federal antitrust laws.

How the industry cozily sets prices and divides up markets is not subject to federal scrutiny. Meanwhile, a fat and sassy industry obstructs attempts to rethink how this country provides health care to those who do not have it, or pay ever higher premiums for less and less coverage.

Insurers have eluded oversight since a Civil War-era Supreme Court ruling that said their business was not interstate commerce. Almost eighty years later, the court reversed that ruling. Congress quickly stepped in to pass the McCarran-Ferguson Act in 1945 to leave regulation up to the states.

A healthy dose of competition would blow the cobwebs off an industry that has grown comfortable with high overhead, luxurious compensation, choreographed market domination, fragmented oversight, a compliant Congress and none of the hypothetical discipline of the marketplace.

A sweet deal? Yes indeed, and consumers and employers have borne the brunt of it for decades.

The move to yank the exemption is picking up momentum. Last week, the House Judiciary Committee voted to repeal the exemption, and there is key support in the Senate to do the same as reform legislation moves through that chamber. President Obama endorsed the idea in a weekly radio address.

A letter to House Speaker Nancy Pelosi signed by 15 House members, including Washington Rep. Brian Baird, said the proposal is simple: "Require the health-insurance industry to operate under the same antitrust laws as all other industries."

U.S. taxpayers are stuck with the epic bill for Congress' retreat from oversight of the country's financial system. In fact, they paid twice. They were gouged by lawless practices, and then subsidized the losses.

Regulation of banks and Wall Street is fundamental, and the business of insurance is part of the financial mix. Repeal the health-insurance industry's lucrative exemption.