Market Allocation in the Health Insurance Industry and the McCarran-Ferguson Act

30 p.This Article examines the scope of the McCarran-Ferguson Act under existing Supreme Court precedent and reviews the sparse case law addressing the MFA’s applicability to market allocation schemes in the insurance industry, including the Blue Cross Blue Shield market allocation scheme. This Article concludes that whether any market allocation scheme is exempt is a close, fact-specific question that courts will not answer in the abstract. On any set of facts, insurers will have considerable leeway in attempting to prove that a given market allocation scheme should be treated as the business of insurance and thus exempt if regulated by state law. A clear determination that the BCBS market allocation scheme is not exempt, or congressional action to repeal the MFA as to the health insurance industry, would remove a primary obstacle to a challenge of the scheme, but it is not clear whether this would affect competitive dynamics among BCBS companies