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Health Insurance Profits Soar as Industry Mergers Create Near-Monopoly |
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Profits at 10 of the country’s largest publicly traded health insurance companies rose 428 percent from 2000 to 2007, while consumers paid more for less coverage. One of the major reasons, according to a new study, is the growing lack of competition in the private health insurance industry that has led to near monopoly conditions in many markets.
The report says such conditions warrant a Justice Department investigation and, says Sen. Charles Schumer (D-N.Y.), provide compelling evidence of the need for a public health insurance plan option as part of the health care reform initiative President Obama and Congress are developing.
Schumer says the report from Health Care for America Now! (HCAN)
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.
According to the recently released HCAN report, “Premiums Soaring in Consolidated Health Insurance Market“:
In the past 13 years, more than 400 corporate mergers have involved health insurers, and a small number of companies now dominate local markets but haven’t delivered on promises of increased efficiency. According to the American Medical Association, 94 percent of insurance markets in the United States are now highly concentrated, and insurers are thriving in the anti-competitive marketplace, raking in enormous profits and paying out huge CEO salaries.
These mergers and consolidations have created a marketplace where a small number of larger companies use their power to raise premiums—an average of 87 percent over the past six years—restrict and reduce benefit packages and control and cut provider payments.
In a letter to the Department of Justice’s Anti-Trust Division, Richard Kirsch, HCAN national campaign manager, and David Balto, former policy director of the Federal Trade Commission and now senior fellow at the Center for American Progress, write:
Simply put, the private insurance companies have secured monopolies or tight oligopolies and exercised that power to put profits ahead of patients….There were no actions taken against anticompetitive conduct by health insurers in the last administration, in spite of the fact that cases by state attorneys general have secured massive fines against these insurers. A lack of antitrust enforcement has enabled insurers to acquire dominant positions in almost every metropolitan market.
They ask for an investigation of the already consummated mergers that “harm competition or create an anticompetitive market structure.” They also urge the Justice Department to conduct investigations of “anticompetitive conduct by dominant insurance companies and challenge that conduct where appropriate.”
Many dominant insurers limit the ability of providers to choose rival insurers or inform patients about more efficient and comprehensive coverage. The DOJ should investigate tools used to stifle competition such as physician gag clauses, most favored nations provisions, all-products clauses, and silent networks, which prevent providers and consumers from having the full range of competitive alternatives.
Schumer last week co-sponsored a Senate resolution urging the creation of a public health plan option and says a public health plan “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.
Click here for a copy of the full report.
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HR 676:The United States National Health Care Act (USNHC) establishes a unique American universal health insurance program with single payer financing. The bill would create a publicly financed, privately delivered health care system that improves and expands the already existing Medicare program to all U.S. residents, and all residents living in U.S. territories. The goal of the legislation is to ensure that all Americans will have access, guaranteed by law, to the highest quality and most cost effective health care services regardless of their employment, income or health care status. In short, health care becomes a human right. With 47 million uninsured Americans, and another 50 million who are underinsured, the time has come to change our inefficient and costly fragmented non-system of health care.
Compare that to the agenda of HCAN.
Indeed, Hr676 would radically improve the healthcare in America. However, that would come at the expense of the health care insurance, HMOs and Pharm companies. After all, those CEOs in those organization have earned their pay and perks according to the media. Sad that many Americans have to die for those profits.
“Greed is good”if one asks insurance company folks and that is what more that a few congressfolks believe.
In the late 80s, early 90s I worked for Harward Community Health Plan in Boston, one of the first PPO organizations. Back then we talked about “providers”,”patients”, “coverage areas” and “Ccoordination of Benefits.” We did not use terms like “industry”, “consumers”,”markets” and “competition.” When did this change in language occur? I think this indicates one of the primary problems with healthcare in this country, is the switch from focusing on care, to profit. There is no such thing as the free-market, with a government that will provide incentives, subsidies, protective advantage, and tax write-offs to whoever offers the most attractive bribe.
Hang them all out to dry. Single payer like the rest of the civilized/industrialized world. Let the Repukelicans call it anything they want, but it has to happen NOW.
We should only support legislation that creates a new total-coverage public health insurance plan option. The private-insurer monopoly is unsustainable. Democrats who don’t support a real public plan option simply do not support real health care reform. The line in the sand is the public option. Period.
I feel that you have the argument all wrong. We don’t need more Insurance Companies, we need Less Insurance Companies. What we need in this country is a Single Payer System. The Insurance Companies are the problem, not the solution.
One of Dylan’s ladies (Lady Liberty, perhaps) said, “That ain’t enough”. (from Black Diamond Bay)
Open enrollment? “That ain’t enough”!!
Waiving pre-existing conditions?? “That ain’t enough”!!
Eliminating the most basic insurance function, the underwriting of risks?”That ain’t enough”!!
And the Insurance Companies say, “But, if you eliminate all of that, there is no reason for our existence!!”
And we should say, as do the French, Exactement !!!
There is no reason to tolerate an industry or business which makes its profits solely upon betting for or against the likelihood of sickness and disability of its customers. And profiting by denying medical care to those the company thinks will become sick or disabled.
As far as being “Merchants of Death”, the insurance industry is a far greater danger to the American populace than all of the illegal drug cartels in the world.
PS. Is there any reason to allow insurance companies to exist? Given that their bets on Life and Death make them the moral equivalent of a game of Russian Roulette?
Only as the French do, to allow those who wish to bet with the insurance companies to do so. Like going to Monte Carlo. As long as any transaction between any French citizen and any insurance company does not directly, or indirectly, cost any other Frenchman a single franc.
But the social contract is that all citizens shall be provided coverage and it be paid by the French Government as the single payer.