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So Far Past the Rubicon

A Trap Hidden in Repeal and Replace

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

Donald Trump won the presidency based on a few big promises. One of those promises was repealing Obamacare and subsequently replacing it with something better. Congress is very slowly inching closer to doing just that. Repealing and replacing Obamacare will be a hallmark for the Trump years and there are a number of different proposals floating around – some good and some not so good. One particularly dangerous idea has taken hold with conservatives.


In 1945, the McCarran-Ferguson Act gave states authority to regulate insurance without the federal government interfering. States wanted to have the power to regulate insurance transacted within a state and, for that to happen, these companies had to be exempted from antitrust regulations.

Many on the left have advocated for years for repeal of McCarran-Ferguson as a way to limit the profits of insurance companies.

So why are Republicans pushing this idea as part of repeal and replace? Some excellent conservatives are pushing a bill called the “Competitive Health Insurance Reform Act of 2017.” Rep. Paul Gosar (R-AZ) argued “by restoring federal anti-trust laws to the business of health insurance, my legislation represents a critical first step to establishing the proper foundation for a competitive and consumer-driven health insurance marketplace.” The problem is that repeal of this law will increase regulation and will empower future liberal administrations to regulate large insurance companies out of existence.

Republicans want to set the table for selling insurance across state lines, yet this bill is not necessary to allow that practice. Back in 2010, this idea was being pushed by liberal Democrats and legislation to nullify McCarran-Ferguson. Andie Brownlow of the American Thinker wrote on March 5, 2010 that this idea would have put in law a conflict of interest:

Congress appears to be gearing up for federal regulation of health insurance and clearing away any states' rights impediments to that end. Although strengthening antitrust laws would ensure that major providers do not collude for unfair advantages, the same power in the hands of the federal government -- a party now with a vested interest in health care -- brings a conflict of interest.

An Op Ed appearing on the Competitive Enterprise Institute (CEI) website in 2010 synopsized the arguments Democrats have made over the years to suspend McCarran-Ferguson:

Democrats have long blamed the McCarran-Ferguson Act of 1945 for aiding insurance industry consolidation and coordinated pricing. So, last year, Rep. Sheldon Whitehouse, Rhode Island Democrat, and Sen. Patrick J. Leahy, Vermont Democrat, introduced a bill that would repeal the limited antitrust exemption.

It is understandable that Republicans want to follow through on the promise to repeal and replace. The ability to open up the marketplace by allowing insurance to be sold across state lines has also long been a goal the conservative movement. With Congress and the White House in Republican control that goal will no longer be a dream. It is now. However, setting the stage for an increase in federal regulation by gutting McCarran-Ferguson seems like a mistake that will have long term negative consequences.


The idea that antitrust law needs to be applied to more companies and expanded is not consistent with free market capitalism. Leaders in government sometimes can’t see the forest for the trees. We don’t need a new form of regulation added to how insurance is delivered to the American people just as we are about to toss of the shackles of the Obamacare nightmare.

The federal government simply needs to get out of the way. Obamacare can be repealed and replaced and the insurance companies of the world will thrive as they provided innovative plans to people across every state in the Union.

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