Congressman Garamendi Original Co-Sponsor of Bill that Would Stop Health Insurance Collusion
Anthem Blue Cross’s Drastic Rate Increase a Wake Up Call that without
Regulation, Insurance Industry Puts Profits Ahead of Patients, Garamendi Says
WASHINGTON, DC – Congressman John Garamendi (D-Walnut Creek), California’s first elected State Insurance Commissioner, today is proud to announce that he is an original co-sponsor of a bill that he helped author to require the health insurance industry to follow the same anti-trust laws that almost every other industry in America is expected to follow.
"When almost every other industry colludes at the expense of consumers, we call it a crime. When the health insurance industry colludes, we call it business as usual," Congressman Garamendi said. "This legislation removes one of the most damaging weapons in the insurance industry’s arsenal: the ability to manipulate the market together behind closed doors. In my eight years regulating the insurance industry in California, what I learned above all else is that you can’t trust the insurance industry to regulate itself. Insurance company executives will scratch and claw their way to maximum profit, and they don’t care who gets hurt along the way."
The Health Insurance Industry Fair Competition Act, H.R. 4626, introduced by Representatives Tom Perriello (VA) and Betsy Markey (CO), restores competition and transparency to the health insurance market. The bill removes the health insurance industry’s blanket antitrust exemption. This will give antitrust enforcers the authority to investigate any evidence of collusion among health insurance companies – a move that puts an end to the 65-year-old prohibition on the federal government’s ability to investigate and hold accountable bad actors in the health insurance industry.
"Anthem Blue Cross’s recent decision to increase rates on customers nearly 100 percent in the past two years, despite earning $2.4 billion in profits in the final three months of 2009, is Exhibit A of what happens when we let insurance companies operate behind a veil of legalized secrecy," Garamendi added. "Removing the anti-trust exemption and including a robust public option are two of the most important tools available to us to improve public health and hold the insurance industry accountable for its actions."
In a story published today by the Los Angeles Times, Congressman Garamendi joins Congressmembers Henry Waxman and Jackie Speier in criticizing Anthem Blue Cross’s plan to increase rates despite receiving soaring profits in a recession.