[Editor's Note: In 1944 the US Supreme Court ruled in United States v. South-Eastern Underwriters(322 U.S. 533) (217 KB) that insurance companies were part of interstate commerce, thus subject to federal regulation and anti-trust laws. Overriding the Supreme Court's ruling, Congress passed the McCarran-Ferguson Act(71 KB) in 1945 that has since protected insurance firms from federal prosecution for price fixing, bid rigging and carving out protected markets.]
Jenny Gold, Staff Writer for the Kaiser Family Foundation's Kaiser Health News, in her Feb. 24, 2010 article "The Antitrust Exemption for Health Insurers: Meaningful or Not?," wrote:
"Insurers are among a handful of industries, including Major League Baseball, that have a special exemption from federal antitrust laws.
The McCarran-Ferguson Act [passed by the US Congress in 1945] gives states the power to regulate the 'business of insurance,' granting insurers a limited exemption from federal antitrust scrutiny. Insurers, for example, under the federal antitrust exemption may be able to meet, share information and agree on pricing for premiums, but experts say that most states prohibit that practice.
The law does not bar the federal government from regulating the insurance industry entirely; the Federal Trade Commission and the Department of Justice are responsible for antitrust enforcement involving mergers and acquisitions."
Are insurance companies still exempt from federal anti-trust laws?
Robert Reich, JD, Professor of Public Policy at the University of California at Berkeley and former Secretary of Labor under President Bill Clinton, wrote on his blog, robertreich.org, in a May 24, 2010 post titled "Obama’s Regulatory Brain":
"The final health care act doesn’t even remove the exemption of private insurers from the nation’s antitrust laws."