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It's hard to compete in a strict regulatory environment.
I'm for more of the same!Compe ion lacking among private health insurers
WASHINGTON – One of the most widely accepted arguments against a government medical plan for the middle class is that it would quash compe ion — just what private insurers seem to be doing themselves in many parts of the U.S.
Several studies show that in lots of places, one or two companies dominate the market. Critics say monopolistic conditions drive up premiums paid by employers and individuals.
For Democrats, the answer is a public plan that would compete with private insurers. Republicans see that as a government power grab. President Barack Obama looks to be trapped in the middle of an argument that could sink his effort to overhaul the health care system.
Even lawmakers opposed to a government plan have problems with the growing clout of the big private companies.
"There is a serious problem with the lack of compe ion among insurers," said Republican Sen. Olympia Snowe of Maine, one of the highest-cost states. "The impact on the consumer is significant."
Wellpoint Inc. accounted for 71 percent of the Maine market, while runner-up Aetna had a 12 percent share, according to a 2008 report by the American Medical Association.
Proponents of a government plan say it could restore a compe ive balance and lead to lower costs. For one thing, it wouldn't have to turn a profit.
A study by the Urban Ins ute public policy center estimated that a public plan could save taxpayers from $224 billion to $400 billion over 10 years by lowering the cost of proposed subsidies for the uninsured, while preserving private coverage for most people.
"Right now, there's no incentive for insurers or big hospital groups to negotiate with each other, because they can pass higher payments on through premiums," said economist Linda Blumberg, co-author of the report. "A public plan would have the leverage to set lower payment rates and get providers to participate at those rates."
"The private plans would come back to the providers and say, 'If you don't negotiate with me, you're going to be left with only the public plan.'" Blumberg continued. "Suddenly, you have a very strong economic incentive for them to negotiate."
Insurers contend their industry is extremely compe ive, and a public plan is unnecessary. About 1,300 carriers operate across the country, although many only have a small share of the market in their states.
"You can have a very compe ive market and still have companies with a high market share," said Alissa Fox, a top Washington lobbyist for the Blue Cross Blue Shield Association.
Fox points to the federal employee health program, which also covers members of Congress. It offers a total of more than 260 options and 10 nationwide plans. Despite all the choices, about 60 percent of federal workers pick a Blue Cross plan.
"Insurers need to be of a significant size to best serve their customers and make sure that people get the best value," Fox said.
Nonetheless, lawmakers are concerned. Big insurers are getting bigger. Small businesses in particular have fewer and fewer options for getting coverage.
Congressional investigators this year looked at insurers catering to small employers around the country. The Government Accountability Office found that the median _or midpoint — market share of largest carrier increased to 47 percent in 2008 from 33 percent in 2002.
There's widespread recognition among lawmakers that a health care overhaul should foster more compe ion among insurers. The debate is over how far to go.
The basic framework lawmakers are looking at would encourage compe ion, even without a government plan. It calls for setting up a big insurance purchasing pool called an exchange. It would be open, at least initially, to individuals and small businesses. The government would offer subsidies to make premiums more affordable.
Consumers would find it much easier to shop for a plan through the exchange. For one thing, they would be able to readily compare benefits and premiums in different plans. Also, participating insurers would have to take all applicants and not charge higher premiums to those in poor health.
Offering the option of a public plan would supercharge the compe ion, supporters say.
Blumberg envisions a plan that pays medical providers more than Medicare, but less than private insurance. Her study estimated it could grow to 47 million members, leaving 161 million with private insurance. Even so, that would make the new public plan one of the largest insurers in the country, rivaling Medicare, Medicaid and big private companies such as Wellpoint and UnitedHealthcare.
It's a scenario that gives pause even to traditional adversaries of the insurance companies.
"The fear and concern is that the public plan could become the market-dominant plan," said Dr. James Rohack, president of the American Medical Association. "When you've got the federal government involved, it can infuse money into a plan to keep it solvent even if the premiums are lower than its actual costs."
Snowe, among the few Republican senators still trying to come up with a bipartisan compromise, wants to hold back on creating a public plan for now and give insurers one last chance to show if they can keep costs in check.
That's doesn't go far enough for liberals, who are loath to give the insurance industry tens of millions of new customers supported by taxpayer subsidies.
"It would give the industry a windfall without any countervailing force to require them to lower their costs," said Richard Kirsch, national campaign manager for the advocacy group Health Care for America Now. "The insurance companies could continue to jack up premiums while getting a whole new market."
http://news.yahoo.com/s/ap/20090822/...ce_compe ion
It's hard to compete in a strict regulatory environment.
The attack....continues.
The last things corps want to do is compete. CEO/CFOs' wet dreams are all about monopolies (Microsoft) and cartels and price fixing, milking captive clients.
PussyEater, tell us how guvmint regs prevent price compe ion among, or even between, health insurers.
And most companies have been "captured" by one insurer and offer/require the employee to "buy" that one plan.
lol, what "regulation" is making it hard to compete?
Well, the regulation that prohibits insurance companies from selling across state lines is the first major "regulation" that comes to mind. Small insurance companies cannot expand their market and large insurance companies are forced to create redundant corporations with all the associated overhead and administration.lol, what "regulation" is making it hard to compete?
no one can out-compete the government, or even tie the game with government.
I agree...most corporations would like to be monopolies.
Illegal
Also illegal.
With a compe ive market, they could "milk" their clients to another provider.
Anytime the government regulates they restrict commerce.
The answer to that isn't regulation; it's for employers to be discouraged from providing insurance at all but, instead, paying the premium in wages and allowing the employee to provide for their own insurance.
I think that much of what this article says is correct in terms of what is happening regarding private insurance but I also think the discussion is great and will lead to a compromise and not a ram rod approach to passing insurance reform. I particularly like this quote:
I have been a proponent of subsidation all along. But it should be across the board regarding the entire health care industry. Especially in the Pharmeceutical industry. Rate regulation should also be a consideration throughout the entire health care industry.The government would offer subsidies to make premiums more affordable.
This allows private industry to remain as the main providers and executors of health care along with government intervention as a needed only basis. Private industry will remain independent as long as they follow government regulations.
Items such as standard office visits will be set at a flat rate. If specialized treatment is deemed necessary then charges increase according to the nature of illness/situation to be treated.
Bravo for this option. I agree except for in the case of existing conditions...this is where government subsidation could be implemented to help the insurance company cover the additional cost of having to except a pre-exisiting condition.Consumers would find it much easier to shop for a plan through the exchange. For one thing, they would be able to readily compare benefits and premiums in different plans. Also, participating insurers would have to take all applicants and not charge higher premiums to those in poor health.
Again...this is just the beginning of a long overdue need to reform health care. But at least it is being investigated and not rammed down our throats by agenda based partisanship.
Props to Obama for at least listening to both sides and not giving in to his cons uents. So Far.
Oh please... that's not going to do anything except prevent older people from getting health insurance as the health insurance companies cherry pick only young healthy people (like myself) to insure.
However, I think this problem can be solved with guns. There are few problems that can't be solved with guns.
There is compe ion in the health insurance industry. I have a neighbor, who's wife a couple years ago, had a serious issue and operation. The peanut counters for his work's insurance policy tried to stop coverage after some pretty high medical bills were paid. His employer, being one of the largest in the state, told them if they screwed their employees wife, they would go to a policy with the compe ion. The insurance company paid.
You can do that when you have a contract or whatever and you're one of the largest companies in the state. The peanut counters are profit motivated people though, so they are going to try and deny as many claims as they can.
Yeah, so what we need is a government program which runs at a loss and is subsidized by the income taxpayers (not you mooches who merely pay payroll taxes).
Nah, we had that covered with the Death Panels until you losers made us take it out.
I think the government can solve all our problems and they definitely should be providing free healthcare to every American out there. I wonder if I can start sending my water and electricity bill to them too? They should take care of that too.
Nah. Then we would have to practice water rationing taking baths only once a week and then we would all stink.I wonder if I can start sending my water and electricity bill to them too?
LOL. Uh yeah, us "losers" who would pay for it for your free riding ass.
Yeah, universal healthcare has never been done before. Next thing you know, the government is putting out fires and locking up criminals. Then, they're providing healthcare for our troops and helping out old people. Next thing you know, we're living in Nazi Germany.
Next thing is you can't get the treatment you need when you need it. And dumb s like DMX eat this up because they can't provide for themselves.
I have healthcare (employer provided, UnitedHealth). I'd like people who can't presently afford it to at least have an option even if it meant I had to pitch in some way. How selfish of me.
ROFL. You don't have . Like many you seek a handout.
I work for AT&T, dumb . ...and not as a receptionist like your dumbass.
Must be why you have like 1,000,000 posts, just sitting there doing all day like all receptionists.
Yes...the govt is going to come in, attack insurance companies, and provide their own universal health care instead.
Why, that's exactly how you increase compe ion.
Think that's what I'll do to my compe ion. Demand they give me all their records, then have Kens, WOAI and others start looking into all the funny business they have been doing.
Cuz that's how you REALLY solve "compe ion problems."
and so it goes...
at&t wouldn't hire a stupid ing moron like you. but on the off chance you slipped through the cracks, i'll let them know.
ROFL. Because free market compe ion is about the government being involved. Goddam this country is ing stupid.
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