Pelosi holds news conference to discuss the Health Insurance Industry Fair Competition Act

Feb 24 2010

Speaker Nancy Pelosi, House Majority Leader Steny Hoyer, Chairwoman Louise Slaughter, Congressman Peter DeFazio, and Wendell Potter, senior fellow on health care at the Center for Media and Democracy and a former insurance industry executive, held a news conference this afternoon in the Capitol to discuss the Health Insurance Industry Fair Competition Act that will end the unfair anti-trust protection for the health insurance industry. The legislation will be on the House floor tomorrow. Below are opening statements from the press conference:

Speaker Pelosi. Good afternoon. I am absolutely delighted to be here this afternoon with Leader Hoyer, with the distinguished Chair of the Rules Committee, Louise Slaughter, with Representative Peter DeFazio of Oregon, and our very special guest, Wendell Potter who is a senior fellow on health care, Center for Media and Democracy, and former head of communications at Cigna and Humana.

Tomorrow will be a very special day in the Congress of the United States because tomorrow we will make real change. We will change from the American people having to operate on the field of the insurance companies for over 60 years to the insurance companies having to operate on the field of the American people. We would not be here today without Congresswoman Louise Slaughter, without Peter DeFazio's work, Chairman Conyers who can't be with us right now, and also the leadership of our new Members of Congress, Congressman Perriello of Virginia, Congresswoman Markey of Colorado to name two who have been pushing this issue.

This bill is about restoring competition, fairness, and choice to the health insurance industry. After 65 years, it is now time for the unfair advantage insurance companies have held over America's families and small businesses to end. As we continue the fight for comprehensive reform, this marks another critical step. As you know, we will be taking up comprehensive health insurance reform shortly but we wanted to make sure that in paving the way for that legislation we paved the way for fairness, for competition, for better care, better quality, better affordability for the American people.

I think you have probably seen recently the enormous profits of the insurance industry, and we think the time has come to end insurance companies with enormous profits, CEOs of insurance companies with enormous salaries telling America's families that they have to pay more for their insurance. Over the past decade, insurance rates have doubled, more than doubled, 100, what is it? 151 percent and that is again, as you saw in California, just the beginning.

So as we have said about our legislation, it is about affordability for the middle class; it is about accessibility of many more people to health care and affordability is central to that; and it is about accountability of the insurance companies. If we have the AAA rating for our insurance policies as we go forward, our insurance public policies as we go forward, then we will improve quality of care, lower cost, and make health care more available to many more people.

It is now my pleasure to yield to a leader on this issue in the Congress, a champion for affordability for the middle class, for whom this issue is central, our distinguished Majority Leader Steny Hoyer.

Majority Leader Hoyer. Thank you very much, Madam Speaker. I thank the Chair of the Rules Committee Slaughter for her leadership on this issue, Mr. DeFazio for his strong advocacy of this legislation and Mr. Potter, we thank you for being here and for your expertise.

Republicans and Democrats throughout the last year and talking about health care have talked about the importance of competition. And they may have a different perspective about how they get there but the free market and competition. We hear our Republican friends talking about that and very frankly, we wanted to set up a greater competition as well to make sure that consumers were getting the best price which would be determined in a free market, acting in a way that free markets were unconstrained and brought prices down. When I say unconstrained, not constrained by any collusive or cooperative behavior. That's what anti-trust is all about. We believe in a free market. We believe in competition. But we know that if we do not preclude people from colluding that prices will be improperly higher than they ought to be. So we want to open competition. That's what this bill is about.

This bill is about making sure that everyone who wants to offer health insurance in America will do so in a free, open market. That will be subject as every other business is, to anti-trust provisions which say you cannot, in effect, make a deal with somebody that you take that part of the market, I'll take this part of the market, and we'll both charge this price. Because then there is not a free and open market to determine the lowest, best price for the best product.

So I am very pleased to be here. I want to congratulate Tom Perriello and Betsey Markey of Colorado, who have been so involved with Ms. Slaughter, Mr. DeFazio, and others, and John Conyers, the Chairman of our committee. And coming to a point where we will place this bill on the floor tomorrow. I am confident it will pass. And I surely hope it passes with a very significant, bipartisan vote. Because there is certainly bipartisan agreement that the free market and competition are clearly in the best interest in all consumers. That's what this bill is about.

Thank you very much.

Speaker Pelosi. A person who has been involved in this issue, removing the exemption to anti-trust laws from the health insurance industry, Chairwoman Louise Slaughter, has been working on this issue since her days in the state legislature in New York and probably even before then. So she came to this Congress determined to make this change and tomorrow her determination will pay off. Madam Chair.

Chairwoman Slaughter. Thank you, Madam Speaker. It is because of you and the Majority Leader that we have reached this point, and it is a very important point for us to have reached. It is totally appropriate that the Congress of the United States lift this exemption because they created it. In 1945, both the Senate and the House passed legislation following a Supreme Court ruling that anti-trust should indeed govern the insurance industry. Each house passed legislation that gave a three-year transition period at which point they would be covered by anti-trust. By the time the bill got to conference and came out of the conference, the exemption had been made permanent, which did not in any way follow what each house had voted but it was ratified then by each house. It was a bad day as far as I am concerned because I know of no industry in the United States which should be exempt from anti-trust, which and their sole purpose is to protect consumers and heaven knows when it comes to insurance we need it.

I am here today to introduce somebody that I have grown so fond of, Wendell Potter. He and I are from the same part of the country, so I was not surprised that Wendell would stand up to insurance industries. All of us can tell anecdotal stories and tell about what people would say to us, but only Wendell Potter who was on the inside—he was the executive at an insurance company—could really give us the true story of what was going on there and he did. He has been so generous with his time, with his expertise, with his friendship and he got started in this because he knew that chicanery was going on in the insurance industry, that phony studies were being made, that people were being denied on the flimsiest of excuses. We are so lucky that we have Wendell Potter and the Wendell Potters of this world, who will stand up when they see a wrong and help to right it. It is a great pleasure for me to introduce to you one of the great Americans of this time, Wendell Potter.

Mr. Potter. Thank you very much, Chairwoman and Madam Speaker. As someone who spent 20 years in the insurance industry, I can attest that this is very important legislation and I can say that it is both substantive and symbolic legislation. The insurance industry has enjoyed an exemption, as everyone has said, for 65 years. And that has contributed to a health care system that has become one of the most dysfunctional and one of the most expensive in the world. And this is time that the health insurance industry begins to abide by the same rules and regulations that every other industry in this country has to abide by.

And it is symbolic in that, I believe this in my view is the beginning of comprehensive reform that will benefit average Americans, working individuals and families more than the big insurance companies and their partners and their allies. And over the 20 years that I was in the industry, I saw competition vanish. We have seen so many mergers and acquisitions over the years that industry now is dominated by a cartel of about seven very large health insurance companies, all of them for profit. So the landscape has changed remarkably in the time that I was in the industry, and I think I have seen also blatant disregard for regulation, particularly at the state level, insurance companies recognize that in many states the insurance departments are not resourced adequately so there is a blatant disregard for regulation.

So I see this as a very important piece of legislation and one that is the beginning of much-needed

reform. Thank you.

Speaker Pelosi. Thank you very much, Mr. Potter. Thank you very much. We are honored by your presence, very informed by your information and you too have made a tremendous difference and when we have that victory tomorrow it will be in large measure because of your courage. Wendell Potter, thank you.

The relentless, that word is identified with Peter DeFazio on this and other issues in the Congress, but he has been indeed relentless in pushing for removing this exemption which health insurance companies have from anti-trust laws of our land. Imagine that they have an exemption, an industry so closely related to cost and well being of the American people with this exemption. This drama has been beaten by Peter DeFazio for a very long time. Tomorrow, we will have a victory and he will be one of our drum majors.

Congressman DeFazio. Thank you, Madam Speaker. Thanks for your support and thanks for making this day possible. Louise, thank you for your tremendous support as we move through this. I would like to give some credit to someone who preceded us here, Senator William Proxmire. He first brought this issue to my attention when I was a freshman Member of Congress and that's as you can tell from my age, sometime ago, almost more than two decades ago. And I have been pursuing this for quite some time like Louise in the interest of fairness and protecting consumers.

Now we have heard a lot in this debate that we should listen. Congress should listen, we have heard that. Well, I went home and listened in August, 14 town hall meetings in the more conservative parts of my district, attended by about 8,000 people in the end. We had to rent fairgrounds and other things. And there was one point of consensus. One. Between those who represented the interests of the group called the Tea Party and those who represented the interests of those called single payer advocates. And that was that this unfair exemption from anti-trust law should not exist for the insurance industry. The whole auditorium would stand up at that point. There was consensus on this issue. So we are listening. We are listening to the American people.

The American people want this reform, and we are going to deliver it tomorrow. This should be bipartisan. I cannot understand how any Republican who is advocating national plans and advocating for free market solutions could be against allowing the free market to work by stopping collusion among these multi-state, multi-national companies that are derogatory to the interests of consumers.

One last point. You know, these, some say, "Well it is the job of the states." This is beyond the capability than even the most sophisticated and well-resourced Justice Departments among the states. When Andrew Cuomo was pursuing the industry with some success, there were other issues he wished to pursue, but they were beyond the scope and jurisdiction of his capabilities. When these multi-state, multi-national companies choose to collude through setting up rating shelves or other things outside this jurisdiction and individual state and import the results of those, you know independent studies or rate settings there is little even the most sophisticated and aggressive state Attorney General can do there beyond their reach. But the federal government should be able to protect consumers in those instances and this would be a beginning of that protection by repealing this exemption.

Speaker Pelosi. Thank you very much. The choice will be very clear tomorrow. Are you on the side of the insurance company and maintaining the stranglehold that they have on America's consumers, impeding progress to be made in their good health and for a healthier America? Or are you on the side of the people? Are you on the side of the consumer? I hope that we have a very strong, bipartisan vote on the side of the consumer tomorrow and we are working toward that end.

Again, I just want to say that this is part of one year ago when we began with the Recovery Package, which now CBO has told us just now has created over 2 million jobs that we had in that legislation — health IT, billions of dollars for health IT, health information technology, billions of dollars for investment in the National Institutes of Health for bio-medical research to make America healthier — to name two — but other initiatives as well. And around the same time, we passed the SCHIP, the State Children's Health Insurance Program — insuring 11 million children.

So we've got a running start on making America healthier at the beginning of last year and in the course of the appropriations process. We will finish our work — one stage of it when we pass the comprehensive bill. Continuing the work we began last year and along the path toward comprehensive care, tomorrow is a very important day for us. So we're looking forward to it with great enthusiasm for fairness for the American people.