Health Insurance Profits Soar as Industry Mergers Create Near-Monopoly

[Joanne98]

http://blog.aflcio.org/2009/05/27/health-insurance-profits-soar-as-industry-mergers-create-near-monopoly/

by Mike Hall, May 27, 2009


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.”

http://blog.aflcio.org/2009/05/27/health-insurance-profits-soar-as-industry-mergers-create-near-monopoly/

[bvar22]

1. These people have no sense of SHAME!

Health Insurance Execs.


AND, these assholes are $LOBBYING$ Congress/Senate to NOT institute a Public Plan.
They have said that IF there in NO Public Option in the Reform, they will VOLUNTARILY cut back on the rate of INCREASE of Health Insurance cost!!!!

[Shallah Kali]

2. Snakes in Suits

Snakes in suits: when psychopaths go to work
by Paul Babiak, Robert D. Hare
http://books.google.com/books?id=J9mvHW1eA14C

Not all psychopaths make a killing in person. Some just go into business and do it by proxy.

As for the insurance lobby promise I think of the old wise tale of the little boy who saved a rattlesnake who was freezing when he promised not to bite him who then of course followed his nature and killed the boy saying 'you knew what I really was when you saved me'.

[eridani]

3. Every single one of them belongs in jail n/t

[OneBlueSky]

4. and just what is it that they provide for all this money? . . .

better healthcare? . . . coverage for more Americans? . . . more efficient administration? . . .

the answer is Nothing! . . . in exchange for hundreds of billions of our healthcare dollars, these corporations provide NOTHING of value . . . because that's not their purpose . . .

their purpose -- by law -- is to maximize shareholder value . . . they can do this in two ways, by increasing income and by decreasing expenses . . . they increase income by charging ever-increasing premiums . . . and they decrease expenses by limiting/denying benefits as much as possible . . . and by refusing coverage to those who most need it, i.e. those with "pre-existing conditions" . . .

so we're essentially paying them all this money to serve as gatekeepers whose sole purpose is to charge us as much as possible while paying out as little as possible . . . if the money that goes to things that have nothing at all to do with healthcare (profits, marketing, advertising, administration, overhead, perks, etc.) was taken from them, there would easily be enough to cover every American with no exclusions . . .

Congress knows this . . . the president knows this . . . and yet they continue to not only include these leeches in the healthcare equation, they actually plan to build the "new" system on the existing one that pays all this money to corporations -- for NOTHING! . . .

great system, huh? . . .