Making health care reform work
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An antitrust law expert at the University of Iowa College of Law expects to see stepped up antitrust activity from the Department of Justice during President Barack Obama’s second term as the government implements health care reform.
“There’s been so much criticism of the reform as an exercise in big government that people have lost sight of how market driven this really is,” says Herbert Hovenkamp.
The health care reform law had been on hold following its passage in 2010 awaiting legal challenges, but since the reforms were upheld by the U.S. Supreme Court last June, he says the president’s task for his second term will be implementing it.
According to the law, that means the creation of online health insurance exchanges in each state where consumers can shop for and purchase the most cost effective insurance plan by offering only those health plans that meet certification requirements. Since most consumers will likely continue to receive their health insurance through their employer, most of the exchanges’ clients will likely be individuals without employer plans, or employers with fewer than 100 employees who can’t afford private group plans.
Those exchanges, he says, are actually markets where different insurance agencies offer different plans most cost-effectively, which the law expects will keep costs low. In order to do that, Hovenkamp expects the Department of Justice to step up antitrust litigation in the health care industry.
“Now that the reform law is here to stay, they have to make it work by making sure that health care organizations stay competitive so that market forces can keep costs low,” says Hovenkamp. “They’ll want to see more players and no market restraints, and that puts a premium on antitrust policy.”
Specifically, he expects to see increased legal scrutiny from the Department of Justice of hospital mergers and pharmaceutical company mergers, and also increased examination of new drug releases from federal agencies.