June 29, 2009

Debunking “Free Market” Health Insurance

Posted in Uncategorized at 1:28 pm by Editorial Team

I keep hearing about massive opposition to a “public option” for healthcare.  It turns out, most of this outrcry is being pushed by the healthcare insurance industry.  Doesn’t this beg an admission that the system is flawed?  Most people couch their arguments in protecting the free market.

So my first question is: What level of competition and market share should be considered free?  The DOJ says an industry is “highly concentrated” when one provider has more than 42% market share.  How should we define a monopoly?  If a company controls 75%, is that a monopoly?

Let’s look at the data:

According to the AMA, 94% of health insurance markets are highly concentrated.  Even in the least concentrated state, California has 2 companies that control 44% of the market.  Missouri, my own state, has Blue Cross/Blue Shield dominating 68% of the market.  7 states have one provider with 75% or more of the market.

Check out Hawaii (98%), Rhode Island (95%), and Alaska (95%)… percentages of state market controlled by TWO companies.  10 states have 80% or more market share between the top two companies.

I admit healthcare is a very contentious political issue.  But simply analyzing this data alone, I want to ask my friends, especially those who are libertarian, if this sounds like a free market.  Well does it?

Our healthcare system is an oligarchy, thanks to hundreds of mergers.  These markets are hardly free and competitve.  There is a reason we are being brainwashed with the public option’s destruction of the free market.  It’s because the people in the health insurance industry know they are fixing prices at huge profits and they don’t want anyone cutting down their gain and forcing them to compete.  The American consumer and employer are getting the royal screw in defense of the “free market.”

The 10 largest healthcare insurers saw profits increase 428% from 2000 to 2007.  In 7 years, to quadruple?  So our premiums have skyrocketed to fill executive coffers…

Whether or not you agree government solutions to healthcare is the answer, you have to agree that the system is  incredibly flawed and needs a major overhaul.

Source: Health Care for America Now

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