Health Maintenance Organizations and the McCarran-Ferguson Act

In the past, Health Maintenance Organizations (HMOs) were victims of anticompetitive practices, but the growth of HMOs casts them as potential growth encouraged by both the federal and state governments. This Note discusses a solution to the potential antitrust problems. HMOs can be exempt partially from antitrust regulation by the McCarran-Ferguson Act. To secure immunity under McCarran-Ferguson, the entity must function in the business of insurance, be regulated by the state, but not be engaged in acts of boycott, coercion, or intimidation. This Note sets forth potential antitrust violations by HMOs, examining the possible application of the McCarran-Ferguson exemption to them. Each of the elements required to satisfy McCarran is discussed in general and applied to HMOs. This Note concludes that the exemption can be applied to HMOs so long as their conduct fulfills the requirements of the McCarran Act.