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Yale Law and Policy Review


McCarran-Ferguson Act, antitrust, health care reform


Since 1945, the McCarran-Ferguson Act (MFA) has shielded the “business of insurance” from antitrust liability, so long as the challenged conduct is “regulated by State Law” and does not constitute “boycott, coercion, or intimidation.” This law, like the dozens of other statutory antitrust exemptions that still exist for other industries, has more or less always been controversial, and efforts to repeal it date back more than thirty years. This Essay asks two questions: (1) what consequences the pending repeal measures might have if one of them becomes law; and (2) what a close examination of this effort might teach us about the general business of MFA repeal and competition in insurance. This Essay proceeds in four Parts. Part I lays out useful background regarding the law of antitrust that currently applies to health and medical malpractice insurers, as well as to the current economic circumstances of their markets. Part I asks: (1) whether there is anything important about these markets that singles them out for special antitrust exemption; and (2) whether there is anything different enough about the two markets that dealing with them in the same way, in the same bill, might be somehow unwise (an argument insisted upon by industry lobbyists). Part II surveys in more detail the legislation that has been considered in the 111th Congress to set the stage for the substantive policy analysis that comprises Part III. A brief Conclusion then offers some broader thoughts about the general problem of repealing antitrust exemptions.