As a follow-up to my column this week on health insurance companies, which has triggered an, er, healthy online discussion (along with the usual name-calling), here’s an interesting sidelight to the debate in Congress. Just how out of touch are some politicians when it comes to average Americans’ struggles with insurance companies? Some of them, specifically Sen. Richard Shelby of Alabama and Sen. Olympia Snowe of Maine, say that the one thing they want to avoid is cutting into health insurance companies’ profits.
Snowe is expected to support health care reform in the end, but Shelby is adamant in opposition, saying that Pres. Obama’s plan for a public option would “destroy the marketplace for health care,” to which most Americans would answer, “*What marketplace?” Since when do Americans enjoy anything resembling a competitive marketplace for health care?
A new report from the reform group Health Care for America Now (HCAN), using AMA data, shows that 94 percent of the country’s insurance markets are “highly concentrated,” according to Dept. of Justice standards. Rather than offering much choice for consumers, the report states, the current health insurance system is “a market failure where a small number of large companies use their concentrated power to control premium levels, benefit packages, and provider payments in the markets they dominate.”
Gee, no wonder premiums have nearly doubled in the last six years, while profits for 10 of the largest health insurance companies shot up over 400 percent. That kind of “marketplace” we can, and should be able to choose to, do without.
This article appears in Jun 30 – Jul 7, 2009.
Well Mr. Grooms,
insurance companies are forced to insure and cannot discriminate on who they can insure — govt regulation.
insurance companies are in the business to make a profit. They want to minimize risk and maximize profit.
I say we can open up the market for health insurance companies via de-regulation. No state licensing requirements for insurance companies. Combine that with letting insurance companies have the freedom to insure who they want to insure.
Do not force companies to provide benefits.
These are free market ideas. So as you can see, we have not had a free market in healthcare.
Mr. Fisher,
In my opinion:
Insurance Companies, their lobbyists and attorneys (to name a few), have invested billions over many years to craft a framework of statutes and laws (Federal and State) that allow them to essentially discriminate by defining “groups”. They cry: we need to segregate people into groups in order to abate risk.
Do you think that Insurance Firms are the only type of business that tries to maximize profits and mitigate risk? No, of course not. However, they are one of the few industries with the power and political influence to “impose profits” without real competitive forces at play.
If you are looking for less restraint on free market, wouldn’t it be better to classify a group as the “Group of North Carolina Citizens” or the “Group of US Citizens”, not severed into small groups that insurance firm can exploit? Why should a 1000 employee NC corporation get better insurance premiums than a 25 employee NC firm? I thnk it is because they re more and more smaller firms and entrepreneurs.
Wouldn’t it mitigate risk even further if each firm had to write premiums from a few standard boilerplate contracts? On the other hand, I suppose the ongoing system of ever-changing legalese and planned obsolescence might take a tool on the attorneys business.
It seems to me that simple uniform, even-handed, transparent (without minimal group segregation) is more effective and will drive down prices that the nurtured bureaucracy fostered to by the so-called free marketers.
Regards,
Joe
, ontract, not one that that mitigate risk? Why couldn’t the State Insurance Commission impose a boilerplate benchmark to which all firms must bid premiums by spreading and allow insurance firm to bid on that basis? The riskInsurance companies are privy to special statutes and legal If you really desire free market in the insurance industry, it seems to me that the concepthave had the right to insure whom they want at the
Frank,
I appreciate your rebuttal. Please note:
I’m a Caucasian male, for what it is worth. I mention because I’m not at all making a racial discrimination claim. I’m using the discrimination as it is defined “to make a choice” and segregation as “to divide and group”. It seems crystal clear to me that the insurance industry’s Modus Operandi is to divide and conquer, not reduce risk. The end result: rising costs while taking a piece of the profits to pad the pockets of lobbyists, lawyers, etc.
Regarding the large corporation versus the small entrepreneur, Sam’s Club doesn’t restrict membership to the little guy. He can join “the club” at the same price as the big player.