Health insurance companies and conservatives have come out big against the public option. Town Hall questioners repeat over and over the health insurance companies' talking point that the poor whittle private health insurance companies couldn't possibly compete against the big bad government private option!
They are saying there's already competition in the health ins market, but that a public option would eliminate this competition.
They don't want us to know their dirty little secret. The truth is, they aren't afraid so much of competition from a public option insurance provider as much as competition in the FIRST place.
Why? They want to protect their health insurance monopolies and near monopolies in nearly 100% of this country's marketplaces.
A recent report by Health Care for America NOW!reveals this ugly picture of that stranglehold a small number of large insurance companies have on this country. Premiums Soaring in Consolidated Health Ins Market
Think I'm biased? Exaggerating? Guess what, Paul Krugman agrees with me (and HCAN)!
More below the fold.
Health Insurance companies aren't afraid of competition against an "unfair" government backed insurance plan. They are afraid of LOSING the widespread health insurance MONOPOLIES that they control in a majority of the health insurance markets nationwide. They are afraid of competition plain and simple.
Based on U.S. Department of Justice guidelines regarding monopolistic practices, 94% of the health care markets in the U.S. are so highly concentrated that in fact they undermine competition and have resulted in higher than average premiums and premium increases.
Such concentration can also result in price-fixing collusion and repressive tactics among the privileged companies lucky enough to have achieved monopolistic or near monopoly control in an area. The report documents 2 such cases in New York State involving UnitedHealthCare Group among others, which Andrew Cuomo, attorney general of NY, said resulted in " hundreds of millions of Americans ripped off by their health insurance companies."
The U.S. Department of Justice calls a market "highly concentrated" if a company "holds more than 42 percent share of that market. That brings the list of states that can be called highly concentrated health care markets to more than 30 - or nearly sixty percent of U.S. states!
Remember, we aren't talking just small city markets, folks. Or major metropolitan areas. The markets they are describing are entire states!
And what is most interesting, much of this monopolistic concentration is happening in many of supposedly tough, independent, "we like competition and can kick ass your ass" (red) states. Small and rural states are the most affected by this lack of real competition. According to the report:
In Hawaii, Rhode Island, Alaska, Vermont, Alabama, Maine, Montana, Wyoming, Arkansas and Iowa, the two largest health insurers control at least 80% of the statewide market.
I would call the above percentage numbers monopolistic, wouldn't you? How can small insurance companies compete? How can small and mid-sized companies get good rates for their employees?
And guess what, Paul Krugman agrees with me! He looked at these statistics and described one of these states:
Arkansas is in effect a one-insurer monopoly state, with no competition at all — unless a public plan is created...In fact, I may have a new hypothesis about the political economy of the health care fight. One thing that’s obvious, if you look at the balking Democrats I chided in today’s column, is that almost all of them come from states with small population. These are also, by and large, states in which one or at most two private insurers dominate the market.
In Alabama the biggest insurer holds 89% (sic 83) of the statewide market, the highest rate in the entire nation.
In Alabama, BC/BS of AL has a statewide market share of 83%. The next largest health insurance provider (Health Choice) controls a measly 5%, which shows that BC/BS has massive control and leverage over rates, premiums in Alabama and who actually gets insured in Alabama.
Sen. Shelby doesn't seemed concerned for his constituents, however.
A tpmmuckraker article Health-Care Market Characterized By Consolidation, Not Competition by Zachary Roth quotes Shelby as saying on Fox News, that President Obama's plan (is)the "first step in destroying the best health care system the world has ever known."
A public option, Shelby added, would "destroy the marketplace for health care."
Not much of a health care marketplace in Alabama, Senator, in case you haven't noticed! Why aren't you fighting for the competition starved citizens in your state? Too busy counting money from the insurance industry?
In Alaska, 60% of the market is dominated by the largest provider (Premera BC_, with Aetna controlling more than a third, resulting in a grand total of 95% of the market share controlled by just 2 insurance companies.
In Montana, where Pres. Obama took questions about competition fairness of the public option, three-quarters or 75% of the market is controlled by ONE insurance company. (BC/BS of MT). Throw in the market share of New West Health , Services, the 2 companies control a whopping 85% of the market.
In Iowa 71 % of the market is controlled by one company - Wellmark BC/BS.
In South Carolina 66% is controlled by one company and in Georgia, 61%
Check out info about your state in this report. It is very eye-opening.
If you are a small business owner in the majority of these markets, do you really have many choices and options to provide your employees with affordable health care. What happens if the major player in your state decides to drop you or raise your rates so high that you are forced to drop coverage? What avenues do uninsured workers have to get health care? The sad truth is, very few.
This partially helps to explain why the percentage of small businesses able or willing to provide coverage has been steadily dropping. They have little leverage to apply to these increasingly large companies and fewer and fewer alternatives.
The truth is, insurance companies are getting bigger and bigger, with few and fewer competitors - which helps to explain the obscene profits these companies have made in the last couple of years. They are reaping the benefits of this lack of competition, and taking advantage of their ability to set prices and premiums and refuse coverage to bolster their bottom lines.
We must DEMAND a public option. We must inform people of how non-competitive health insurance markets including major cities are. We must let them know that the insurance industry isn't trying to fix this - the trend has been toward MORE consolidation and monopolizing of markets, not less in recent years.
I wish someone asking a question would ask Pres. Obama about the state of "competition in their state or a neighboring state or city." I think it would shock and illuminate at the same time.