DeFazio Bill Targets Insurance Industry
Byline: TIM CHRISTIE The Register-Guard
The insurance business is the only major American industry that enjoys an exemption from federal antitrust law, and U.S. Rep. Peter DeFazio says it's past time for the special treatment to end.
DeFazio, a Springfield Democrat, introduced legislation this week - dubbed the Insurance Competitive Pricing Act - that would repeal the 54-year-old McCarran-Ferguson Act, which granted insurance companies the antitrust exemption.
"They can and do legally price fix and collude to jack up prices," DeFazio said in an interview.
Removing that antitrust exception and subjecting insurance companies to free market forces would go a long way toward addressing skyrocketing malpractice premiums that have hammered doctors this year, he said.
"My bill goes beyond the scope of medical malpractice, but it goes to the heart of the problem," he said.
In Oregon and Lane County, some doctors who practice high-risk specialties, such as obstetrics, have retired or quit delivering babies because of out-of-sight insurance premiums. Similar woes have hit doctors in other states.
A spokeswoman for the insurance industry, Brenda O'Connor of the American Insurance Association, said she couldn't comment on DeFazio's legislation because she hasn't yet read it.
The industry would support eliminating the antitrust exemption, she said, but only if state regulators no longer had authority to control insurance prices.
The insurance industry in Oregon and elsewhere also advocates caps on non-economic damages in malpractice lawsuits to keep premiums from continuing to rise.
But DeFazio said caps are a smokescreen for the real problem, which is the insurance industry's own "aggressive pricing strategies, questionable accounting practices and poor investments."
Analysis by his staff shows that there's little difference in insurance premiums in states with award caps and those without.
The huge increases in premiums are cyclical, and typically coincide with downturns in the economy and subsequent investment losses suffered by insurance companies, he said.
Insurance companies invest the premiums paid by customers in the stock market. …