In 1945, The United States Supreme Court ruled that Congress has the authority to regulate the insurance industry. Rather than doing so, Congress passed a law known as McCarran-Ferguson, giving states the sole authority to regulate insurance companies. Since that time, insurance companies have been exempted from federal anti-trust laws, which are designed to promote competition by prohibiting monopolies and other practices in restraint of trade.
The insurance industry may soon find itself brought under federal regulation as part of national health care reform, which in various incarnations seeks to repeal McCarran-Ferguson. However, questions about whether medical malpractice insurance will be included in the repeal have raised strong opposition from the property-casualty insurance industry.
The main thrust of repealing McCarran-Ferguson as part of health care reform is to bring health insurance companies under federal jurisdiction. But medical malpractice is not health insurance, as the property-casualty industry is quick to point out.
It may be argued that states already prohibit trust-like activity among both health insurance and medical malpractice insurers. Activities such as price fixing, bid rigging, and market allocations are all illegal under most state laws, according to the Congressional Budget Office, a legislative agency providing objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget. Each state's power, however, is limited in its scope, and federal action could possibly be more comprehensive.
Ironically, federal regulation of medical malpractice could actually decrease competition, increase costs, and result in smaller companies merging into larger ones, all perceived ills that anti-trust laws are aimed at preventing. This information comes from the Congressional Research Service, a non-partisan agency within the Library of Congress which provides policy and legal analysis to committees and members in both houses of Congress.
The latest word from the Hill is a move led by Democrats to keep the exemption from federal regulation in place for companies that offer malpractice insurance.
No matter what the politicians decide, our firm will continue to fight for the rights of the injured and seek the maximum allowable compensation necessary to compensate our clients for the harm they have suffered at the hands of negligent or incompetent doctors, hospitals, and health care providers. If you believe that you or someone you love has been the victim of medical negligence or medical malpractice, contact our office for help.
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