Group life & Health Insurance Co. v. Royal Drug Co.: the McCarran-Ferguson Act and Health Service Plans.
Until recently, contractual relationships between health care providers and health insurers appeared to be immune from antitrust scrutiny. The Supreme Court ended this apparent immunity in Group Life & Health Insurance Co. v. Royal Drug CO., 440 U.S. 205 (1979), holding that insurance plans offering goods and services to policyholders are not exempted by the McCarran-Ferguson Act from the federal antitrust laws. By denying a McCarran-Ferguson exemption, the Court did not decide the ultimate issue--whether the insurers in fact had violated federal antitrust law. This Note reviews Royal Drug in light of precedent and of the purpose of the McCarran-Ferguson Act. This Note contends that the result in Royal Drug follows logically and consistently from the Court's earlier readings of the Act, but that the Court's reasoning is unclear and, even under its strongest reading, unconvincing; hence, an alternative approach to interpreting and applying the McCarran-Ferguson Act is suggested. Finally, this Note analyzes the application of Royal Drug by lower federal courts and discusses its implications for the interface of health law and antitrust law.
D003132:Commerce; D006801:Humans; D007341:Insurance / Q000331:legislation & jurisprudence*; D007343:Insurance Carriers / Q000331:legislation & jurisprudence*; D007356:Insurance, Pharmaceutical Services / Q000331:legislation & jurisprudence*; D013781:Texas; D014481:United States