You Don't Say...

Two weeks ago (Anti-Trust Me) I mentioned that the Democrats are moving some legislation to remove the exemption from anti-trust laws enjoyed by the health insurance industry. I mentioned that this is primarily a bit of political theater; as a policy matter, it's more like a band-aid that wouldn't address the big issues facing our health care system:

This [the McCarran-Ferguson Act] is the law that essentially says the regulation of insurance companies is up to the individual states. McCarran-Ferguson also exempts insurance companies from federal anti-trust laws. This is the provision the Democrats are zeroing in on.

But it seems a little narrow to me. The root problem is that we want to have our socialist cake and eat it, too. This is evident in Schumer's declaration that what we really need to do is "bring true competition to the health insurance industry." And to some extent that's true; that is, after all, the rationale behind the public option. But it's a band-aid designed to keep a malfunctioning system on its feet a bit longer. No, the key to the whole thing revolves around a dirty little secret: the whole idea of health insurance is, at its core, socialist.

Still, the Democrats introduced H.R. 3596 ("The Health Insurance Industry Antitrust Enforcement Act of 2009"), described by the Congressional Budget Office in this way: "H.R. 3596 would prohibit such [health insurance] companies from price fixing, bid rigging, or allocating markets while providing coverage for health insurance or medical malpractice claims."

But as Donny Shaw over at OpenCongress reported today, the CBO looked at this proposal over the weekend and projected that it wouldn't make much of a splash:

H.R. 3596 could affect the costs of and premiums charged by private health insurance companies; whether premiums would increase or decrease as a result is difficult to determine, but in either case the magnitude of the effects is likely to be quite small.

To the extent that insurers would otherwise engage in the prohibited practices and be prevented from doing so by enactment of this bill, premiums might be lower. (That effect is likely to be small because state laws already bar the activities that would be prohibited under federal law if this bill was enacted.) To the extent that insurers would become subject to additional litigation, their costs and thus their premiums might increase. Based on information from the Justice Department, the Federal Trade Commission, the National Association of Insurance Commissioners, consumer groups, and private attorneys, CBO estimates that both of those effects would be very small, and thus that enacting the legislation would have no significant effect on the premiums that private insurers would charge for health insurance.