Homework 10/26/09 Read and respond to the following letter

Write a two page letter responding to 2-3 issues addressed in this very thought provoking letter. Please make sure that you follow the format outlined in this letter. You may write the letter as if your are one of the following recipients.

Your letter must address 2-3 issues raised in this letter regarding the McCarran Ferguson Act of 1945. Please check your grammar and spelling to make sure that you have few to little errors. This assignment is worth 50 points.

For extra credit ask 5 adults their perspective and thoughts regarding this law. Students can earn 10 point extra credit per adult questioned.

To:
President Barack Obama
Sen. Dianne Feinstein
Sen. Barbara Boxer
Rep. Dan Lungren

September 16, 2009

How can we have health care reform without repeal of The McCarran Ferguson Act of 1945? As I know, you are aware that The McCarran Ferguson Act exempts Insurance companies from the Sherman Anti Trust Act. The only industry other than Major League Baseball that are allowed to legally engage in collusion and legally participate in Price Fixing.

There has been an attempt almost every year to overturn this Act but the insurance industries with their wallets make sure a bill never gets to the floor for a vote. I first became aware of this unfair consumer practice in 1974 when I was employed in The Auto Body Industry. Automotive Associations have been the most involved in attempting to repeal this Act, because for Body Shops 95% of their business is one customer only, the insurance companies, and there is collusion by insurers to set the hourly rate they pay the shops.

This Act allows the insurance companies to legally be involved in Price Fixing. Yet let any two or more businesses meet and set prices and they are rightfully prosecuted for Price Fixing under The Sherman Anti Trust Act. Yet we allow all insurance companies exemption from this same action, why? During the presidential election McCain's concept, and also recently mentioned by the President, of allowing people to buy cheaper health insurance from a state that has better rates is never going to happen, insurers would lose their exemption from Anti Trust laws due to interstate commerce. Am I wrong? If not, why is this not being talked about with regard to Health reform?

A public option would actually, for the first time, create competition among insurers and they would have to compete on value. Without a public option we must have repeal of The McCarran Ferguson Act, if not how do we get a free and competitive market concerning health insurance?