When special status is created for a collective of corporations to own the means by which an essential product or service is available that is either corporate socialism or communism. Antitrust move poses few risks to health insurers
But industry analysts say courts have long limited the scope of the exemption to allow federal regulators to intervene in instances where competition could be jeopardized. They note the law has never stopped regulators at the Department of Justice and the Federal Trade Commission from intervening in a merger or acquisition.
In practice, the exemption from federal antitrust laws mainly allows insurers to share data on payments and risk ratings — a useful collaboration among life and casualty insurers. But Wall Street analysts point out that giant health insurance companies like Humana, Wellpoint Inc. and UnitedHealth Group have little need to share data, thanks to their national size and scope.
“While the threat to repeal the exemption makes for good headlines, we can’t really see how it alters the business for the established publicly traded players,” wrote JPMorgan analyst John Rex in a note to investors.
With 94 percent of U.S. health insurance markets meeting the Justice Department standards for “highly concentrated” — meaning dominant insurers face little competition — most academics agree reform is needed. But they point out that federal regulators could have prevented much of that concentration under existing law.
Since 1996, the federal government has cleared 400 mergers in the health insurance field, according to the American Medical Association.
