Jack & Jill Politics

From TPM:

Health-Care Market Characterized By Consolidation, Not Competition
By Zachary Roth – June 29, 2009, 12:50PM

As Congress gets set to take up health-care reform, there’s a crucial piece of data that hasn’t received nearly the prominence in the debate that it deserves.

Defenders of the status quo on health care like to point out that a public option will destroy the system of robust free-market competition that currently exists.
Sen. Richard Shelby (R-AL), speaking earlier this month on Fox News, called President Obama’s plan 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.”

But the notion that most American consumers enjoy anything like a competitive marketplace for health care is flatly false. And a study issued last month by a pro-reform group makes that strikingly clear.

The report, released by Health Care for America Now (HCAN), uses data compiled by the American Medical Association to show that 94 percent of the country’s insurance markets are defined as “highly concentrated,” according to Justice Department guidelines. Predictably, that’s led to skyrocketing costs for patients, and monster profits for the big health insurers. Premiums have gone up over the past six years by more than 87 percent, on average, while profits at ten of the largest publicly traded health insurance companies rose 428 percent from 2000 to 2007.

Far from healthy market competition, HCAN describes the situation as “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.”

So extreme is the level of consolidation, in fact, that one former top Federal Trade Commission official working with HCAN has sent a letter to the Justice Department’s Antitrust Division, asking for an investigation into the health insurance marketplace.

The problem is most acute in small rural states, according to the report. In Shelby’s own state of Alabama, the biggest insurer, Blue Cross Blue Shield, controls 83 percent of the statewide market. There, and in nine other states — Hawaii, Rhode Island, Alaska, Vermont, Maine, Montana, Wyoming, Arkansas and Iowa — the two largest health insurers control at least 80 percent of the market. So much for Shelby’s “marketplace for health care.”

The report doesn’t consider how this reality stands to affect the forthcoming congressional battle for reform. But extreme consolidation may actually be making it harder, not easier, to win support from lawmakers for a public option.

That’s because insurers who control large swathes of a given market stand to see their bottom lines particularly threatened by the introduction of a lower-cost public option. So, in turn, they’ll be particularly aggressive in pulling out all the stops to pressure lawmakers to oppose the plan. Given the healthy amount of campaign dollars that some wavering members take in from the major insurers, that’s hardly encouraging.

Of course, the Senate is where the major legislative showdown will likely occur. So in some forthcoming posts, we’ll be taking a close look at just which senators have taken money from insurers who control major percentages of the state-wide market — and where those senators stand on the public option. Stay tuned…

From HuffingtonPost.com:

Along the way, the Health Care Investigative Unit will work with reporters and editors from the Huffington Post and our Investigative Fund who will vet their work according to professional journalistic standards. Certain scoops will be picked up and managed by the Huffington Post Investigative Fund and could turn into deeper investigations.

Those up for special scrutiny include (and their receipts from the health care industry):

Sen. John McCain (R-AZ): $7,504,867
Sen. John Kerry (D-MA): $7,341,399
Sen. Arlen Specter (R-PA): $2,149,503
Sen. Max Baucus (D-MT): $1,795,949
Sen. Mitch McConnell (R-KY): $1,743,835
Sen. Joseph Lieberman (I-CT): $1,685,890
Sen. Richard Burr (R-NC): $1,350,454
Sen. John Cornyn (R-TX): $1,346,574
Sen. Jon Kyl (R-AZ): $1,321,457
Sen. Charles Grassley (R-IA): $1,160,826
Sen. Sherrod Brown (D-OH): $1,081,378
Sen. Jim DeMint (R-SC): $ 999,611
Sen. Bob Corker (R-TN): $ 994,699
Sen. Orrin Hatch (R-UT): $ 980,417
Sen. Thomas Harkin (D-IA): $ 935,711
Sen. Saxby Chambliss (R-GA): $ 919,793
Sen. Blanche Lincoln (D-AR): $ 896,067
Sen. Debbie Ann Stabenow (D-MI): $ 827,294
Sen. Benjamin Cardin (D-MD): $ 797,185
Sen. Christopher Dodd (D-CT): $ 788,650
Rep. Tom Price (R-GA, 6th): $2,090,127
Rep. Frank Pallone (D-NJ, 6th): $1,627,024
Rep. Joe Barton (R-TX, 6th): $1,518,285
Rep. John Gingrey (R-GA, 11th): $1,392,343
Rep. Charles Rangel (D-NY, 15th): $1,304,569
Rep. John Dingell (D-MI, 15th): $1,148,060
Rep. Eric Cantor (R-VA, 7th): $1,136,519
Rep. Roy Blunt (R-MO, 7th): $1,102,468
Rep. Charles Boustany (R-LA, 7th): $1,058,786
Rep. Nathan Deal (R-GA, 9th): $1,046,519

Just trying to provide information to you, about the fight on our hands.

Found this DailyKos Diary:

This Is Why Insurance Companies Fear The Public Option(Updated)
by Something the Dog Said
Tue Jun 30, 2009 at 10:07:29 AM PDT

Folks have been asking, with good reason, just why it is the big insurance companies are so weak in the knees about a public option health care plan. After all, these are generally the same folks who say they the Government can not run any thing well, that always complain Government costs more than the private sector (all evidence from the Iraq war to the contrary aside) so what should they fear? Well, Health Care For America Now (HCAN) has compiled a new report which sheds some serious light on this.

In a nut shell, the Health Care Insurance companies are concerned about protecting their near monopolies. The way these companies are going at this is by controlling major portions of a local market, at the State level. The Department of Justice considers a market “highly concentrated” if one company holds 42% of market share. Highly concentrated is just a step or so below a monopoly. This would still not be too bad if the remaining 58% of the market were made up of many other companies competing for business, but in health care this is not the case. In 30 States there is this highly concentrated market. In 12 States (nearly a quarter of the United States) 80% or more of the market is controlled by only the top two health care insurers.

The problem in large metropolitan areas is actually worse in some cases then the State level data would suggest. In fact according to the AMA 94% of all insurance markets in the United States are highly concentrated. This means there is no real competition for insurance. Yes, there is a choice for consumers and businesses, but there is no competitive pressure which the free market worshiping Republicans will tell you controls prices and assures service will remain high. The Dog is a moderate believer in the capitalist system of economics, but there must be real competition if this system is to work. This is not what is happening here.

48,000,000 uninsured people in this country is the soaring cost of the insurance. When there is a choice between putting food on the table tonight and covering some unknown future health issue, there is no choice. We have been told all these companies are holding down costs as much as they can, well friends and neighbors, the Dog is here to tell you that is flat bullshit. Over the last 13 years there have been 400 mergers of health insurance companies. This means there are now at least 200 less companies offering insurance than there were in 1996. Less competition means less pressure to keep costs down.

This is why the big companies are so freaked out by the idea of the public option. They can not buy out a government competitor. Since a public option will not be for profit with shareholders who will take a very sweet deal to leave a market, they will not be able to use their deep pockets to buy market share. Worse from their point of view, they will not be able to collude with a public plan to keep rates artificially high, under the premise everyone wins, well everyone except the consumer who only needs health care to stay alive and healthy and happy.

The argument has been pitched the Insurance companies are afraid for their existence if there is a public option, and long term the Dog thinks that is true, but it is really all about short term returns the Insurance companies are worried about. The profits they have been able to reap through consolidation have been enourmous. Between 2000 and 2007 the top ten publically traded insurance companies saw profits increase 428%! Let that sink in, in a little over seven years they saw a 428% increase in profit, all the while passing on double digit increases in premiums to their customers!

This is unacceptable. The Dog does not find mean Republicans to be great, at least not modern Republicans, but there was a great one at the beginning of the 20th Century, Theodore Roosevelt. One of TR’s greatest deeds was the Trust Busting campaign. He went after the monopolies of the early 20th Century and dismantled them. This was critical to the growth of the economy of the United States, and the Dog thinks the time has come for some more Trust Busting.

It is clear health care is needed by every citizen, for many reasons. Those reasons range from the humanitarian desire for everyone to have a healthy long life, to the utilitarian need for our nation to have a healthy productive workforce if we are to be successful. No matter what the reason, it has come to the public awareness we must have this service and it must be for all. This means we can not leave it to the greed of corporatists to deliver. The Dog’s father said “Greed knows no boundaries”, this is a true observation of the human condition. It is for this reason we must have the public option. Without it we are at the mercy of the least greedy of a group of businessmen and women who have proven their greed beyond a shadow of a doubt.

There is also a need for new legislation limiting the size of health care companies. If they believe in the market, then they must live in a market! With a service as critical as health care there must be limits on the size in any metropolitan area and any State of the market any company can control. There should be no more than a thirty percent market share and no two companies should be allowed to control a total of more than 50% of the market in any given area. There is honest money to be made from health care, and those who will make it honestly should be happy with these restrictions. Those who find it too big a burden, are allowed to exit this market. The public option will be more than sufficient to cover those who they will not.

Please take action today! Call the Senators Snowe and Schumer and tell them not to add a trigger to the public option.

Contact info below:

Senator Olympia Snowe
Phone: (202) 224-5344
Toll Free: (800) 432-1599

Senator Charles Schumer
Phone: (202) 224-6542

The floor is yours.

Just trying to keep folks informed about Universal Healtcare and the obstacles. This is the most important issue facing The President, IMO.