Federal legislation that would repeal a law exempting health insurers from antitrust provisions took heat Friday from insurers and members of Congress from Tennessee and Georgia.

"The proposal is not necessary for health care reform and is a distraction from seriously addressing those issues," said Scott Wilson, spokesman for BlueCross BlueShield of Tennessee.

U.S. Sen. Lamar Alexander, R-Tenn., said the move was political punishment for insurers disagreeing with wider health care reform.

"If they really want more competition to reduce health-care costs, they should support Republican proposals to allow health-insurance companies to compete across state lines and support curtailing junk lawsuits against doctors," he said.

Earlier this week, Sen. Patrick Leahy, D-Vt., said Senate Democrats are pushing forward an initiative that would end "price fixing, bid-rigging and market allocation in the health and medical malpractice" insurance fields, The Associated Press reported.

A House committee voted 20-9 this week to end the exemption.

U.S. Sen. Bob Corker, R-Tenn., said he did not know that the measure would have any effect.

"From the people we have talked to, it's very unclear what impact, if any, this would have since the state already regulates these companies in these particular areas," he said.

Karen Ignagni, president of America's Health Insurance Plans, the trade group that represents insurers such as Cigna, said dropping the exemption would just create confusion. Cigna would not comment for this story, instead deferring to the trade group.

"There is no area of health insurance that is not regulated in a detailed manner at the state level," Ms. Ignagni wrote in a letter to Rep. John Conyers, D-Mich., who's chairman of the House Judiciary Committee. "Injecting a second regulatory scheme holds the potential to undermine the current regulatory structure."

Ms. Ignagni's group released a report earlier this month stating that the Senate health care reform bill would lead to premium increases. Democrats have called that study politically motivated.

U.S. Sen. Saxby Chambliss, R-Ga., said he hasn't decided how he feels about dropping the antitrust exemption. He said he is "reviewing the notion and will withhold judgment until I see the language and the matter is fully debated."

U.S. Rep. Zach Wamp, R-Tenn.; U.S. Rep. Lincoln Davis, D-Tenn.; and U.S. Sen. Johnny Isakson, R-Ga., could not be reached for comment.

PDF: Ignagni letter

FAST FACT

Antitrust law refers to the regulation of unfair business practices that inhibit free trade and health competition between companies that inhabit the same industry market sector.

Source: wisegeek.com