Conservatives and other opponents of the "public option" for health care say that it would hurt competition. But in fact, most health insurance markets fall under what the Department of Justice considers a "highly-concentrated market," or near-monopoly. Observers say in such cases, introducing another choice -- a public health insurance option -- would actually dramatically increase competition.
A report released today shows that health insurance company mergers and industry consolidation have resulted in near-monopoly markets where a small number of large companies are able to control premium levels and benefit packages. Health care reform advocates point out that while insurers are thriving in the anti-competitive marketplace, shrinking competition among health insurance companies is a major cause of spiraling health insurance costs. Health insurance premiums have skyrocketed, going up more than 87% on average over the past six years, according to the report.
The Department of Justice considers a market "highly-concentrated" if one company holds more than a 42% share of that market, a level that is common in more than 30 other states. The report points out that 94% of insurance markets nationally are "highly-concentrated." Almost all Southern states suffer under such near-monopolies.
According to the report, insurer consolidation also disproportionately disadvantages rural states. In several rural states across the nation the two largest health insurers control at least 80% of the statewide market. In Alabama, for instance, the biggest insurer holds 89% of the statewide market, the highest rate in the nation for a single company. Even more populous states in the South have serious market concentration problems; Virginia's largest health insurer, for example, controls a 50% share of the statewide market.
The combined market share percentage of the top two insurers in each state in the South:
A report released today shows that health insurance company mergers and industry consolidation have resulted in near-monopoly markets where a small number of large companies are able to control premium levels and benefit packages. Health care reform advocates point out that while insurers are thriving in the anti-competitive marketplace, shrinking competition among health insurance companies is a major cause of spiraling health insurance costs. Health insurance premiums have skyrocketed, going up more than 87% on average over the past six years, according to the report.
The Department of Justice considers a market "highly-concentrated" if one company holds more than a 42% share of that market, a level that is common in more than 30 other states. The report points out that 94% of insurance markets nationally are "highly-concentrated." Almost all Southern states suffer under such near-monopolies.
According to the report, insurer consolidation also disproportionately disadvantages rural states. In several rural states across the nation the two largest health insurers control at least 80% of the statewide market. In Alabama, for instance, the biggest insurer holds 89% of the statewide market, the highest rate in the nation for a single company. Even more populous states in the South have serious market concentration problems; Virginia's largest health insurer, for example, controls a 50% share of the statewide market.
The combined market share percentage of the top two insurers in each state in the South:
Alabama - 88Health care reform advocates are calling on the Department of Justice to investigate the health insurance industry. The report also underscores that a public health insurance option would force private insurance companies to compete -- bringing down cost, guaranteeing quality and setting a benchmark for coverage and transparency.
Arkansas - 81
Florida - 45
Georgia - 69
Kentucky - 69
Louisiana - 74
Mississippi - n/a
North Carolina - 73
South Carolina - 75
Tennessee - 62
Texas - 59
Virginia - 61
West Virginia - 54
I am a health insurance agent in Utah. I sit on the board of the Utah health underwriters as webmaster for http://www.bcbstx.info/ and http://www.utahinsuranceexchange.info/. I was heavily involved in designed a web connector to help Utah residents by pulling private and state sponsored insurance mechanisms together. It had a low budget of around $150k that virtually guaranteed health insurance coverage through either the private or state programs. Better yet all the local carriers agreed to split the costs. Our state insurance task force committee rejected the idea. They elected to go for a Massachusetts type connector program that isn't working well when you actually dig deep and check facts of where they are now. Our state approved H.B. 188 with a zero fiscal note attachment! My point is, I have been a fly on the wall in countless legislative meetings, insurance board meetings, hospital board meetings, the list goes on. The problem is conflict with the market demanding profit in all sectors of the system. Tough order to fill and keep costs down? You are absolutely right when you claim that healthcare is now unsustainable. I have been crying that a long time. Nobody listens.
June 25, 2009 2:18 PM | Reply
I lived in Alabama from 1984 to 2001. During several portions of that period, I was without health insurance, though I never qualified for any public program, such as Medicaid or Medicare.
While uninsured, I had a few occasions to seek medical care. At those times, I was advised to volunteer my services as a guinea pig for drug testing, in exchange for health screening that might reveal the cause of my symptoms. This sort of advice was apparently routine; it came from social workers at different hospitals, private charities, and a county public health agency, over a period of several years. I never took that advice, though I knew people who did.
Apparently, drug companies do a great deal of testing in Alabama. I remember hearing frequent radio advertisements, calling for volunteers for these studies. I have not noticed similar advertising anywhere else that I have lived or traveled. I suspect the drug tests are conducted there in order to exploit the uninsured and underinsured population.
June 26, 2009 5:09 AM | Reply
If you are uninsured and does not have insurance, you should check out the website http://UninsuredAmerica.blogspot.com -California
June 26, 2009 5:48 AM | Reply
"In Alabama, for instance, the biggest insurer holds 89% of the statewide market"
vs
"The combined market share percentage of the top two insurers in each state in the South:
Alabama - 88"
I'm just a confused engineer who is normally good with numbers. Can someone explain to me how the second largest insurer has a negative one percent of the market share?
September 11, 2009 2:06 PM | Reply