Reigning in Big Insurance: A First Step
by Ana Maria Rosato
In January 2021, Congress passed the Competitive Health Insurance Reform Act ("CHIRA"). The Vermont Business Journal succinctly summarized CHIRA's importance Decades of consolidation by health insurance brokers has primed the industry for abuse, allowing insurers to exert market power in order to raise premiums, restrict competition, and deny consumers choice."
CHIRA is a good FIRST step in requiring some part of the insurance industry to play by the same business rules as other businesses. There is zero reason to permit the insurance industry to continue being exempt.
Back in 2007 when I wrote this blog, I learned and revealed that the ENTIRE insurance industry was exempt from our nation's anti-trust laws. That means that insurance corporations are free to price gouge, collude, and other things that no other industry -- except baseball -- is allowed to do. And NO BUSINESS should be allowed to do.
This blog shared story after story of how Big Insurance -- State Farm, All State, and Nationwide as well as USAA -- deliberately betrayed their customers AND U.S. taxpayers to the tune of billions of dollars. And was allowed to do so because the companies are legally allowed to be in cahoots with each other.
Congressman Gene Taylor (D-Miss) was a tremendous champion for his constituents facing financial devastation after Hurricane Katrina ravaged the entire region demolishing homes and businesses. Taylor called out insurance corporations in no uncertain terms on the floor of the U.s. House of Representatives, in the media, and at home in Mississippi.
The Insurance Journal quoted Taylor speaking at a January 2007 meeting on the Mississippi Gulf Coast in a town called Ocean Springs. Congressman Taylor described what he believed happened specifically because the insurance companies are allowed to collude. I think they called one another and said ‘if you don’t pay, we won’t pay.”
It is imperative to bring the insurance industry under the same anti-trust laws as every other businesses are required to do. My 2007 blog -- A.M. in the Morning! -- is a cautionary tale of what goes wrong when an industry fails to play by the same rules as other businesss.
© 2022 Ana Maria Rosato. All rights reserved.
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