FTC says Minnesota plan will raise health costs for consumers

According to the staff of the US Federal Trade Commission, legislation pending before the State of Minnesota legislature that seeks to exempt  certain activities by state health care cooperatives from federal and  state antitrust law would likely raise health care costs and reduce  insurance coverage for consumers there. The FTC's Bureau of Competition,  Bureau of Economics and Office of Policy Planning filed a detailed  comment with Minnesota State Representative Tom Emmer (Republican),  responding to his request for the FTC's views on Minnesota House Bill HF  No 120 and its companion legislation, Senate Bill SF No 203.

The FTC staff comment observes that the bills appear to authorize  anticompetitive activities, including price fixing and concerted  refusals by the cooperatives and their members to deal with health plans  and other purchasers. According to the comment, "nothing in the bills is  likely to prevent the harmful effects that arise from immunizing price  fixing...[and] these bills would deprive health care consumers of the  protections of the antitrust laws and the benefits of competition."

Specifically, the comment states that "the bills, if enacted, would harm  Minnesota consumers through higher prices for health care services,  higher insurance premiums, lower levels of insurance coverage, and lower  wages. All Minnesota taxpayers, moreover, would likely bear the burden  of this proposal, as state-sponsored insurance programs would have to  pay more to provide coverage for the most vulnerable segments of the  population." The comment also explained that an antitrust exemption is  unnecessary to improve health care quality and that the bills may not  succeed in immunizing "health care cooperatives from liability for  conduct that violates federal law."