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CONCURRENT RESOLUTION
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WHEREAS, Antitrust laws are crucial to ensure that the free |
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market works for consumers, but the McCarran-Ferguson Act of 1945 |
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created a special exemption from federal antitrust laws for |
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insurance companies; and |
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WHEREAS, In 1944, the Supreme Court's decision in United |
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States v. South-Eastern Underwriters clarified that the business of |
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insurance is interstate commerce and subject to existing antitrust |
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laws; the following year, Congress responded by hurriedly passing |
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the McCarran-Ferguson Act, which permitted state regulation of |
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insurance companies; a section of the act was also crafted to |
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provide insurers with a three-year moratorium during which they |
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could study federal antitrust laws and adjust their practices to a |
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competitive marketplace; however, a seemingly innocuous phrase |
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inserted in the bill in conference committee was later interpreted |
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by the courts such that the temporary delay became broad, permanent |
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immunity, completely contrary to the intent understood by all, |
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including President Franklin Roosevelt, who specifically discussed |
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the limited moratorium upon signing the act; and |
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WHEREAS, The exemption from antitrust laws has allowed |
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insurance companies to collude to drive up prices, share or divide |
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markets, restrict coverage, and reduce payouts; some lines of |
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insurance, including property and casualty insurance, have formed |
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cartel-like rating bureaus that collect and pool claims data from |
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different companies, enabling them to engage in joint |
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price-setting, joint policy-language development, and the use of |
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the same or similar computer programs designed to systematically |
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underpay claims; health insurers have banded together to share |
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pricing information, and premiums have soared sharply while doctors |
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and hospitals are underpaid; and |
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WHEREAS, Unfettered by antitrust regulations, a handful of |
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insurers have so dominated their markets that consumers have little |
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or no choice in providers; more than 90 percent of health insurance |
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markets in more than 300 metropolitan areas have become "highly |
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concentrated," as defined by the Federal Trade Commission, |
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according to the American Medical Association; a 2008 survey by the |
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Government Accountability Office found the five largest providers |
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of small group insurance controlled 75 percent or more of the market |
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in 34 states, while in 23 of those states, they controlled 90 |
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percent or more of the market; and |
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WHEREAS, Competition is the cornerstone of our economic |
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system, but for nearly seven decades, the insurance industry's |
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singular immunity from antitrust laws has allowed excessive |
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corporate concentration to distort the marketplace; ending this |
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special treatment would check monopolistic practices, spurring |
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competition that would improve coverage and expand choices while |
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bringing down costs for American consumers and businesses; now, |
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therefore, be it |
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RESOLVED, That the 85th Legislature of the State of Texas |
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hereby respectfully urge the United States Congress to end the |
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antitrust exemption for insurers; and, be it further |
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RESOLVED, That the Texas secretary of state forward official |
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copies of this resolution to the president of the United States, to |
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the president of the Senate and the speaker of the House of |
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Representatives of the United States Congress, and to all the |
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members of the Texas delegation to Congress with the request that |
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this resolution be entered in the Congressional Record as a |
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memorial to the Congress of the United States of America. |