The House Judiciary Committee has approved a bill that “fixes a mistake” in removing the federal antitrust exemption for health and medical malpractice insurers.

In a 20-9 vote today (Oct. 21), the panel passed HR 3596, The Health Insurance Industry Antitrust Enforcement Act of 2009. The bill calls for ending the exemption to ensure these insurers “cannot engage in price fixing, bid rigging or market allocations to the detriment of competition and consumers,” according to the text of the bill.

The exemption was granted under the 1945 McCarran-Ferguson Act, which defers insurance regulation to state antitrust oversight. HR 3596 does not apply to the information-gathering and rate-setting activities of any state insurance commission or any other state regulatory entity with rate-setting authority, the bill states.

With the House Judiciary Committee’s approval, the bill now moves to the full House.

John Conyers Jr.

Rep. John Conyers Jr. (D-Mich.), chairman of the House Judiciary Committee, called the bipartisan vote “an important step forward toward opening up health and medical malpractice insurance markets to real competition.”

“Joined by three of my Republican colleagues, the House Judiciary Committee agreed to bring antitrust enforcement to the two most abusive practices of the health insurance industry – price fixing and market allocation,” Conyers said in a statement. “Although state regulation of this industry is crucial – and is preserved in this bill – it has proved insufficient to prevent these particularly abusive practices.”

Conyers added that the bipartisan support for the bill shows unified support against price fixing or “carving up markets” and the legislation “fixes a mistake sitting on the federal statutes for over sixty years, making an important contribution to the health reform efforts underway in both houses of Congress.”

An identical bill – SB 1681 – is awaiting a hearing before the Senate Judiciary Committee.  Published reports indicate that Sen. Charles Schumer (D-N.Y.) is seeking to include the antitrust legislation as an amendment to a comprehensive health reform bill coming up for debate by the full Senate.