Legislative Files

Unfortunately, neither group is protected by their current advocates. "Consumer advocates" advocate for more government regulation of companies. One need only look at the insurance industry to see the worthlessness of government regulation. When "consumer advocates" cannot achieve their goals in the legislature, they go to court and hope to regulate, or at least get wealthy, by judicial fiat.* Businesses are no better off, because the Chamber of Commerce and other business oriented/funded groups are seeking to close the courts to everyone via unconscionable, and often one-sided arbitration agreements. Not only does this harm commerce (because people are less likely to buy less products and services from less established companies if there is no chance of legal recourse), but it prevents businesses who are injured from seeking recourse.

Our Goals for the 110th Congress Include:

Reforming the Federal Arbitration Act
Currently consumers are being sent mandatory binding arbitration agreements that limit the ability of consumers to protect their rights in a neutral forum. An overburdened judge, when presented with a mandatory binding arbitration clause, will often without looking to determine if the clause is valid, stay the proceeding and send it to arbitration. Besides there being limited opportunity for review of an arbitration decision, arbitration is usually very expensive (even compared to litigation), usually prevents class actions (making it impossible to vindicate consumer rights and enforce consumer protection laws) and unfairly favors repeat players (the defendant corporation which has the power to select the arbitration forum).

Reforming the Employee Retirement Income Security Act
The United States' economy was very different when ERISA was enacted in 1974. The vast majority of people worked for mid to large size companies and health insurance was just beginning become a necessity. In 1974, the terms HMO, PPO, POS, etc... were unfamiliar. You went to the doctor, you or the insurer paid for the services rendered, and that was it. In these much simpler times, insurance was straightforward, and Congress had a compelling interest in having businesses provide their employees with health coverage. While the government still has a compelling interest in employers providing health coverage, ERISA is out of date, but ERISA is making it difficult for the self-employed and small businesses to get affordable health coverage and is driving up costs and pitting employee against employer in large corporations. We need to update ERISA (or even start from scratch) to reflect modern economic realities, and to ensure that employees, employers and health care providers are being served by the healthcare financing system. We need laws that promote private sector competition between insurers and ensure that insurers do not continue to make windfall profits at everyone else's expense.

Clarify Health Insurance Portability and Accountability Act of 1996
Due to Congress's inability to draft clear legislation, the intent of HIPAA is not being realized. Health insurers routinely impose pre-existing condition and other limits upon changing insurers. These limitations effectively prevent movement between insurers, thereby allowing the current insurer to charge the highest premium the insurer could possibly expect the insured to be able to pay. Note that state regulation of health insurance premiums tends to be minimal at best since many states probably consider federal law to have preempted most state regulation.

Repeal McCarran-Ferguson
The antitrust exemption for insurance companies should be eliminated. It is this exemption that has allowed insurers to use coercive economic pressure on healthcare providers, and has resulted in cost shifting from the insured to the uninsured. With some healthcare plans, the coverage is so limited that the plan amounts to nothing more than the purchasing of a right to the network price. In the automobile insurance sector, McCarran-Ferguson has been used to drive down repair shop prices and unreasonably limit a claimants choice as to where they get their vehicle repaired.
S.618 is a clean bill which would eliminate the industry's antitrust exemption. Unfortunately S.618 is losing out to other bills which are supported by the insurance industry. Those bills would allow insurers to bypass state regulation by obtaining a license to sell insurance from a federal department of insurance. While federal regulation of insurers would reduce the cost of regulatory compliance, the federal government's track record for regulating industry is abysmal. Therefore, the CLRC is encouraging concerned citizens to call their senators and representatives, to ask them to immediately pass S.618, and pass S.618 without ammendment.

Center for Legal & Responsible Commerce