(CNN) - By a lopsided vote of 406 to 19, the House of Representatives has voted to repeal a law that protects health insurance companies from federal antitrust prosecution. Backers of repealing the exemption say it would inject new competition into the health insurance industry and reduce premiums, but its prospects of passing the Senate are uncertain.
Fact Check: Would eliminating health insurance companies' antitrust protections cut premiums?
(Get the facts and the bottom line after the jump)
– The McCarran-Ferguson Act, passed in 1945, grants insurers what the Kaiser Family Foundation calls "a limited exemption from federal antitrust scrutiny." Critics note that the only other industry with a similar exemption is professional baseball.
– In a 2009 analysis, the nonpartisan Congressional Budget Office reported that removing the exemption for health insurance would allow the federal government "to pursue cases it otherwise would not be able to
prosecute." But the report concluded that existing state laws already prohibit those activities, such as price-fixing, bid rigging and market allocations.
– David Balto, a senior fellow at the left-leaning Center for American Progress, argues that "individual states' departments of insurance are not necessarily equipped to take action." He says he studied 33 states, and "none had taken an antitrust enforcement action in the past five years."
– But the CBO predicts that removing the exemption would have "no significant effect on premiums." Scott Harrington, a professor at the University of Pennsylvania's Wharton School and an adjunct scholar at the
conservative American Enterprise Institute, agrees, writing in the Wall Street Journal, "There is no evidence that the exemption has increased health insurers' prices or profits or contributed to higher market concentration."
Eliminating the health insurance industry's exemption from federal antitrust law could open the door to more scrutiny of the health insurance industry, but there's no hard evidence it would reduce premiums.