May 20, 2009

Health care coalition asks Justice Department Antitrust Division for comprehensive investigation into health insurance market



A report today released by Health Care for America Now reveals shocking levels of concentration in the private health insurance market in most states, spurring the grassroots health care coalition to issue a request to the Justice Department to conduct a comprehensive investigation into the state of the private health insurance market.

According to the report, more than 94 percent of all insurance markets in the United States are “highly concentrated,” a term defined by the U.S. Justice Department as a market in which one company holds more than a 42 percent share.

Where one or two companies dominate, competition suffers. And in this case, the American people suffer, too. The report states:



Without competition among insurers, insurers have no reason to drive costs down, and without additional choices in the marketplace, consumers have no choice but to continue to pay inflated prices.

In an environment where they can pretty much set the prices and rules, insurance companies have done very well for themselves.



Profits at 10 of the country’s largest publicly traded health insurance companies rose 428 percent from 2000 to 2007 (from $2.4 billion to $12.9 billion). In 2007 alone, the chief executive officers at these companies collected combined total compensation of $118.6 million—an average of $11.9 million each. That is 468 times more than the $25,434 an average American worker made that year.

That’s right. 468 times more than the average worker, who has also witnessed health insurance premiums jump 120% from 1999-2007 while wages grew only 29%. If companies are doing so well, why do they keep hiking up our premiums?

“They are taking money out of the pockets of consumers and putting it into their own pocketbooks,” says David Balto, former Policy Director of the Federal Trade Commission and now a Senior Fellow at the Center for American Progress, who co-drafted the letter to the Department of Justice.

Senator Chuck Schumer (D-NY), blasted the current state of the private insurance market, but maintained all is not lost and that giving Americans the option of a public health insurance plan will help restore our broken system.



This is the starkest evidence yet that the private health care insurance market is in bad need of some healthy competition. A public health insurance option is critical to ensure the greatest amount of choice possible for consumers. We believe that it is fully possible to create a public health insurance plan that delivers all the benefits of increased competition without relying on unfair, built-in advantages. If a level playing field exists, then private insurers will have to compete based on quality of care and pricing, instead of just competing for the healthiest consumers.

Balto also emphasized that the report underscored the dire need for a public health insurance option to fix the current mess, stating “The public plan will restore the two elements necessary for a competitive market: choice and transparency. “

Today’s report comes just as conservative Republicans -- led in the Senate by Sens. Tom Coburn (Okla.) and Richard Burr (N.C.) and in the House by Reps. Devin Nunes (Calif.) and Paul Ryan (Wisc.) -- issue their own plan for health care reform under the name the “Patients' Choice Act.”

Problem is that their new “plan” hinges on the idea of preserving the right of the individual to buy what plan they want on the private insurance market. A choice that we just learned is basically imaginary.

Other than that, their plan is mostly the same thing we’ve heard from conservatives before-- tax credits that don’t even begin to cover the actual cost of paying for your own health insurance, taxing your health care benefits as a way of funding said credits, yadda yadda yadda. Wasn’t a good idea before. Still isn’t.

Sam Stein writes on the Huffington Post that critics are not only concerned that the plan does not deliver real reform, but may actually make our current crisis even worse and encourage employers to drop health benefits.




The Patients' Choice Act of 2009 effectively ends tax breaks for employers who provide health coverage to their workers, choosing instead to give a $5,710 tax cut to families and a $2,290 cut to individuals to help them pay for health insurance coverage. Critics insist that this system would end up costing both business and consumers more over the long term. And some objective analysts have agreed. After all, families are currently paying approximately $12,300 a year for health care today.

So, just to get this straight. We have a broken private insurance market and the best conservatives can come up with is encouraging employers to drop employer-sponsored plans and push even more people into the individual insurance market -- alone -- with a bunch of greedy monopolies? Really.

I wonder, can you FAIL Blog proposed legislation?

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