Congress cranks up pressure on insurance industry

By Donna Smith and John Whitesides

WASHINGTON (Reuters) - Democrats in the U.S. Congress moved on Wednesday to repeal the health insurance industry's exemption from antitrust laws, cranking up the pressure in a growing battle over President Barack Obama's healthcare reform plans.

The moves were the latest chapter in an escalating feud between the industry and backers of sweeping healthcare reform that would tighten regulations and create a government-run public insurance option to compete with private insurers.

The fight intensified after an industry lobbying group issued a report saying the healthcare reform plan under consideration in Congress would raise insurance premiums, which sparked protests from Democrats and the White House.

"It's time to level the playing field for American healthcare consumers and make the insurance industry play by the same rules that other industries live by," Senate Democratic leader Harry Reid said.

Proposals in the Senate and House of Representatives would repeal or refine the antitrust exemption granted the industry in 1945. Supporters said the exemption limited competition in an industry where one or two companies often dominate a state insurance market.

"It's a different universe today than it was in 1945, and this exemption is antiquated, out-of-date, and doesn't belong," Democratic Senator Charles Schumer said.

Senate Democratic leaders said they would offer their proposal to repeal the exemption as an amendment to a sweeping bill to overhaul the U.S. healthcare system when it hits the Senate floor in the next few weeks.

The House of Representatives Judiciary Committee passed a plan to limit the exemption and make health and medical malpractice insurance companies subject to laws on price-fixing and market allocation.