Health Care For America Now

Guess what! Almost 100% of health insurance markets in this country are monopolies.

That's according to a new report released by Health Care for America Now today:

Some argue that health insurance industry competition across the U.S. is ample. In fact, research shows a startling and consistent absence of competition as the industry consolidates with more mergers and acquisitions. For example, according to a nationwide survey by the Government Accountability Office, the median statewide market share of the largest insurer selling coverage to small employer groups increased to 47 percent in 2008 from 33 percent in 2002. Americans pay for this consolidation in the form of higher health plan premiums, surging insurance company profits, and a growing number of uninsured people.

…

The U.S. Justice Department considers a market “highly concentrated” if one company holds more than a 42 percent share of that market…

94% of insurance markets in this country are highly concentrated. When markets are highly concentrated, the Department of Justice begins to get concerned about anti-competitive behavior.

This anti-competitive behavior is not speculation, either:

These are not theoretical behaviors. Insurers have been exposed numerous times rigging the system. An investigation by the Boston Globe in December 2008 exposed a, “gentleman’s agreement that accelerated [the] health cost crisis.”

…

When small, independent providers want to negotiate with multiple health plans, large insurers exert enormous pressure to stop them. The statewide trade group for doctors in New York sued UnitedHealth Group Inc., the nation’s second-largest health insurer by enrollment, for allegedly using illegal coercion in just such a scheme to limit competition.

…

In a separate matter UnitedHealth agreed to pay $400 million to settle multiple suits alleging price fixing and other anti-competitive behavior. The attorney general of New York, Andrew Cuomo, stated that this was, “a huge scam that affected hundreds of millions of Americans [who were] ripped off by their health insurance companies.” Numerous other insurers were implicated in the same scheme, including Aetna Inc., Cigna Corp. and WellPoint Inc.

Senator Chuck Schumer (D-NY), is appalled:

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.

Health Care for America Now has sent a letter to the DOJ [pdf], asking them to investigate these mergers and the resulting anti-competitive behavior, challenge mergers and anti-competitive behavior where there is grounds for challenge, and present a report to Congress with the findings.

Anti-trust lawyer David Blato had this to say about the anti-competitive nature of the insurance industry:

"For a market to work effectively, you need two things: choice and transparency. Neither of those are present in the insurance market," said Balto, who served in a senior position at the Federal Trade Commission during the Clinton administration. "Relying on the current insurance market as the foundation for health care reform is like trying to cross the Atlantic in a raft."

Of course, I agree.

In a country where virtually 100% of the insurance markets are uncompetitive (including areas where the market share of one company reaches 60, 70, or 80 percent), it's clear Americans are at the mercy of the insurance industry. Our skyrocketing premiums attest to this. If you have no choice, you can't take your business elsewhere when your insurance company denies your claim or makes you jump through hoops to get normal treatments reimbursed. Without competition, insurance companies that control your local market can raise premiums and cut benefits with impunity, and there is nothing you can do about it.

Decades ago America realized monopolies were bad  for the country. Today, we must continue on in that tradition. There is no competition in the insurance markets, and that has caused the health care crisis we're facing today. To fix the situation, we need to give everyone in America a choice.

Overnight, Congress could fix this situation. By passing a public health insurance option that is open to everyone, people will suddenly have a choice for their health insurance. Congress can break these monopolies and allow people to take their business elsewhere if they want to.

In America, when we are dissatisfied with something, we send a message with our feet. We go somewhere else, to a competitor who can provide better services at lower prices. The whole system hinges on choice, which is why anti-trust policing is so important. We need that choice again in the health insurance market, because private industry has proved to be more collusive than competitive. We need a public health insurance option.