This Is Why Insurance Companies Fear The Public Option

( – promoted by buhdydharma )

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.

Originally posted at

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.

One of the reasons we have over 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.  


Skip to comment form

  1. the in-law’s for the obligatory Holiday Dinner/day. DH’s parents are wonderful people, in their 80’s, and three of his sisters are okay, one is pretty cool actually, but the one, J, is a doctor and she is married to R, an extremely successful businessman, in health insurance biz. I can’t even begin to talk about them, keep in mind Im married almost 20 years, so we have some, let’s just say “history” with this childless couple and their pedigree dogs. I’ve been force fed the Travelogue Photo Albums from their African Safari vacations, and listened to the apologetic explanation of how the meat from their kill gets donated to feed an entire village. Ive seen pics of their Aspen Ski Lodge, their summer home. And their Winter home near the grandparents, which, BTW, they generously bought for them, and made sure all the sibs understand that that house is THEIRS not “ours” (a future “inheritance”). etc.

    I don’t talk politics with them. Ever.

    I hate dislike them, I confess. But not for their politics (which I truthfully dont know what they are but Id guess theyre GOP) or even their obscene wealth. Its for the way they treat us…. me, my husband (her brother) and our kid.

    …snip… I’ll spare you the details.

    I have no sympathy for these people who are whining about losing some smidgeon of their wealth in the Health Care Reform Revolution so that the rest of us can live. Just live.

    Fuck them.

  2. I fundraise for progressive organizations.  Currently we are fundraising for the DCCC (I know, I know!) in efforts to demonstrate support for the public option in health care legislation.  Recently I spoke with an RN who related the following as more norm than exception.  The RN will have a patient who needs a particular procedure or medication, and will be told by the provider, “that’s not covered”.  More often than not the patient, unable to bear the out-of-pocket expense, will go without.  Implicit in this is the fact that insurance companies diagnose medical conditions.  They, not the doctors, not the nurses, decide who needs and gets what.  Morally indefensible.      

    Here’s a link that can help us ‘follow the money’: “Tracking Your Representatives’ Healthcare Cash”

    Great post.  Thanks.

Comments have been disabled.