ObamaCare:HHS Secretary Kathleen Sebelius vs. McCarran-Ferguson Act

"Then, on Dec. 21, Ms. Sebelius announced that insurance companies seeking rate increases of 10% or more in the individual or small group market must publicly justify the hikes under standards set by her department.

Insurance regulation has traditionally been a state responsibility, and 43 states must already approve proposed insurance-rate increases. ObamaCare does not authorize HHS to deny rate increases, but the agency said that if a state "lacks the resources or authority" to conduct the kind of review the agency wants, it will conduct its own." - Karl Rove 01/06/2010 (1)

Rove makes a grand point. Sebelius has decided to have the gun fight at the OK corral with health insurers. Only problem is, the OK corral is owned by brothers Pat and Homer.

The McCarran-Ferguson Act is a federal law that was enacted on 03/09/1945. The act had the co-sponsors of democrat Pat McCarran of Nevada and republican Homer Ferguson of Michigan. (2) (3) (4)

The law gives insurers a very narrow exemption to anti trust laws. It allows "the business of insurance" to share loss data, jointly develop insurance forms and allows for the standardization of policy language. It more importantly allows states to regulate and tax insurance. (5) (6) (7)

Moreover, the "business of insurance" is otherwise subject to all other aspects of federal anti-trust. (8) (9) The business of insurance is subject to state level anti trust laws as well. (10)

Notes:

(1)http://online.wsj.com/article/SB10001424052748704405704576063892468779556.html?mod=WSJ_Opinion_LEADTop

(2) http://www.naifa.org/advocasy/irr/mf.cfm

(3) http://www.ohioinsurance.org/factbook2001/chapter6/chapter_6k.htm

(4) http://en.wikipedia.org/wiki/McCarran%E2%80%93Ferguson_Act

(5)http://www.ohioinsurance.org/factbook2001/chapter6/chapter_6k.htm

(6) http://www.bradenton.com/business/story/2047936.html

(7) http://www.pianet.org/IssuesOfFocus/HotIssues/modernization/2-12-10-2.htm

(8) http://www.pciaa.net/web/sitehome.nsf/lcpublic/210?opendocument

(9) http://www.answers.com/topic/mccarran-ferguson-act-of-1945-1

(10) http://www.namic.org/fedkey/07mfa.asp